Minnesota's top insurance regulator is warning Minneapolis about "unacceptable" gaps in insurance for newcomer transportation companies that allow people to essentially become chauffeurs of their personal vehicles.
Minneapolis enlisted the help of Tim Vande Hey, deputy commissioner for insurance in the Minnesota Department of Commerce, as it crafts new regulations governing services like Lyft and UberX.
Those services are currently operating illegally in Minneapolis since city regulators say they must be licensed as taxicabs under existing ordinances.
"There are significant gaps in insurance for both the drivers, passengers" using the companies, as well as pedestrians, Vande Hey said in a letter to the city after studying the UberX policy.
In a separate consumer alert, the department said users should carefully check both their personal policies and those held by services like Lyft and UberX.
"Finding out after-the-fact that you have gaps in coverage can mean serious financial devastation," Commerce Commissioner Mike Rothman said in the alert. "Take steps now, ahead of time, to ensure you have the coverage you need."
At issue is how the UberX commercial insurance, provided by James River Insurance Co., interacts with personal policies held by the drivers. Uber, the company offering the UberX services, has said the policy supplements a driver's personal auto insurance and can also become primary insurance if the personal insurance does not apply.
But Vande Hey noted that commercial auto insurance was not intended to be supplemental to an existing personal auto policy.
