Transportation network companies like Uber and Lyft are growing so rapidly that their services are outpacing regulation and support.
Insurance companies, however are finally starting to catch up.
"The cool thing about the millennials is they're bringing in all of this new economy. And that's what Uber and Lyft are,” said Sacramento State Farm Insurance Agent, Michele Adams. “They're new economy. And we in the insurance industry need to adapt to the changes and we're excited to be part of it."
Beginning March 21, State Farm will start offering gap insurance for Uber and Lyft drivers in California.
Right now drivers depend on their regular auto insurance policy, along with what the ridesharing company provides.
For example, here in California, TNC companies like Uber and Lyft provide $1 million in liability.
But Adams says the coverage is limited, and really only applies when a customer is actually in the car, or for the driver, on the way to picking up a customer.
But there is little to no coverage for damage to the car itself if in a collision.
State Farm's new endorsement will cover the car and driver when the app is turned on and the driver is sitting and waiting for a fare, as well as when the driver and car on the way to pick up a customer.
The new coverage is designed to fill in the gaps to make sure drivers and their vehicles are covered completely.
"This is brand new. It's been a long time coming. Insurance companies have been talking with the department of insurance,” Adams said. “Dave Jones, the commissioner, has been very cooperative, we have worked together and we are excited in California to be able to offer this.”
As for how much the extra gap insurance is going to cost?
Adams says they're still working out those details, but it will depend on the type of coverage the client has currently, but you can contact a State Farm agent for a consultation.