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Last Updated: 12-18-2025

Commercial ride-sharing companies, or transportation network companies (TNCs), have long been established in dozens of U.S. cities and play a major role in the public transportation market. TNCs use mobile technology to connect potential passengers with drivers who use their personal vehicles to provide transportation for a fee.

However, the  with participating in ride-sharing services have grown more complex. Rising accident costs, higher legal expenses, social inflation, and increasingly complicated claims put pressure on insurers and transportation network companies (TNCs). These trends have pushed insurers to reassess pricing, reserving, and coverage structures for TNC drivers.

A major concern is that coverage gaps can still arise at different points in the ride cycle, especially in the period when a driver is logged into the app but has not yet accepted a ride request. While most personal auto policies continue to exclude coverage when a vehicle is being used for livery or commercial purposes, insurers have developed a range of rideshare endorsements and hybrid commercial–personal solutions aimed at filling these gaps more reliably than in the past.

A TNC is an organization offering prearranged transportation services for compensation using an online application or platform to connect passengers with drivers willing to transport them. Instead of hailing a cab or calling for a car service, consumers in need of a lift can download the app and connect with drivers who use their personal vehicles to pick up passengers. The app also allows users to get a price quote, track the driver’s location and pay their fare using a credit card on file. main TNCs are Uber, Lyft and Via.

Ride-sharing is different, however, than taking a traditional taxi or limousine. Taxis and limousines are typically licensed by the state and/or local transportation authority. The vehicles are required to be inspected and drivers must be properly licensed. In addition, taxi operators are required to have commercial insurance that protects a passenger and third parties (i.e., pedestrians or other drivers) in the event of an accident. TNCs may not be subject to the same requirements that apply to taxis and limousines. Additionally, commercial auto insurance for a TNC is typically more expensive than personal auto insurance because it presents more risk and therefore may be cost prohibitive for individuals only driving on a part-time schedule.

It is not uncommon for personal auto policies to exclude coverage for livery or receiving compensation for driving. As a result, a TNC driver’s personal auto insurance policy may not provide coverage when the driver is using their car to transport people in a ride-sharing arrangement for a fee. This applies to liability insurance, personal injury protection coverage in no-fault states, comprehensive coverage and collision, and Uninsured Motorist/Underinsured Motorist.

Another significant concern is determining at what point in time a driver is operating the vehicle for hire. There are three periods in the ride-sharing business model: Period 1: App on, waiting for ride request; Period 2: Ride request accepted, no ride-share passengers in the vehicle; and Period 3: Passenger in vehicle.  Additionally, many drivers may have apps for multiple transportation network companies active simultaneously.  Most state laws regarding TNCs include similar language. Several state laws combine Period 2 and Period 3 as described above and require higher limits of insurance while the driver is actively engaged in a ride.

Transportation network companies (TNCs) comprehensive commercial coverage for drivers, including $1 million in primary commercial liability insurance during Periods 2 and 3, when a driver has accepted a ride request or is transporting a passenger. During Period 1, when the driver is online and awaiting a match, coverage remains substantially more limited, with some states requiring minimum liability limits of $50,000 per person, $100,000 per incident, and $25,000 for property damage. To address persistent coverage gaps—particularly for first-party comprehensive and collision protection—TNCs continue to rely on secondary, contingent policies that are activated only when drivers maintain their own qualifying physical damage coverage. In response, insurers have expanded the availability of rideshare specific endorsements, which offer enhanced protection during all driving periods, including the historically underinsured Period 1. The current market is now defined less by on-demand insurance startups and more by mainstream carriers and TNC integrated protection options, such as Uber’s commercial liability framework and optional injury protection, which streamline coverage across personal and commercial use.

Insurance regulators oversee insurance companies and insurance agents, not TNCs. The insurance laws and regulations apply to the insurance company and the insurance producer issuing the insurance policy to the TNC or the individual driver. However, as TNCs gained in popularity, state insurance regulators took action and worked with the TNCs to ensure consumers are adequately covered. The Â鶹´«Ã½ and many state insurance departments issued bulletins cautioning consumers of the potential limitations of insurance coverage. Today, nearly all U.S. states and the District of Columbia have enacted legislation setting insurance requirements TNCs, creating a largely nationwide regulatory framework. Many of the laws followed a basic framework developed in a coordinated effort between TNCs, personal auto insurers, and insurance trade associations.  The framework became known as the ,  in collaboration with several major insurance companies.

The TNC Model Bill includes express permission of personal auto policies to exclude coverage for TNC-related driving, mandatory primary liability coverage during Period 1 of at least $50,000 bodily injury per person, $100,000 bodily injury per incident and $25,000 property damage depending on state law, and mandatory primary liability coverage during Period 2 of at least $1 million. Coverage may be maintained by the TNC, the TNC driver, or a combination of the two. TNC coverage is not contingent upon a denial of claim payment from the person’s personal auto policy (PAP). Under the TNC Model Bill, personal auto insurers are granted a statutory right of contribution against TNCs for erroneously paid claims. The TNC Model Bill does not require coverage for medical payments, personal injury protection, collision and comprehensive (other than collision), as well as uninsured motorist (UM) and underinsured motorist (UIM) coverage.

The National Conference of Insurance Legislators (NCOIL)  based on the TNC Model Bill to regulate insurance requirements for TNCs and their drivers. The NCOIL model includes two modifications from the TNC Model Bill. The modifications include language requiring disclosure if there is a lien on the vehicle to be used for TNC services and adding to the section on rating agencies used to determine which surplus lines insurers are eligible to provide coverage for TNCs.

The legislation and regulatory action ensure that drivers are not unknowingly driving without insurance coverage which is illegal due to financial responsibility laws in most states. Most of the enacted legislation does not require comprehensive or collision coverage while the app is on, but the driver is not connected with a passenger. This means the driver may lack physical damage coverage for their own vehicle during that time period unless the driver seeks additional coverage from a personal auto insurer. Rideshare insurance coverage options are widely available to fill this gap in coverage. Drivers may also consider increasing the limits of Period 1 coverage as the TNC coverage may only meet the minimum liability coverage required by law. Additionally, some personal auto policies may help drivers pay the deductible required under the TNCs coverage.

The Â鶹´«Ã½ created the Sharing Economy (C) Working Group in 2014 under the Property and Casualty Insurance (C) Committee. The group produced the Transportation Network Company Insurance Principles for Legislators and Regulators adopted in 2015. Although the Working Group disbanded in 2018, the Property and Casualty Insurance (C) Committee continues to monitor these issues.

The Innovation, Cybersecurity, and Technology (H) Committee plays a key role in tracking broader technology‑driven market developments, including how digital platforms, mobile apps, and emerging technologies affect insurance risks, consumer protection, cybersecurity, and data governance.