Farmers Insurance Evolves Its Time-Honored Model to Meet Mobility Demand

  • Natalie Mattila
  • April 11, 2017
  • 0

As ridesharing has grown in popularity, auto insurance companies have expanded their efforts to meet the demand from drivers for coverage.

Most auto insurance covers personal use and adds coverage for a portion of the time that drivers are signed in to a ridesharing app. However, the coverage is limited — only about $50,000 to $100,000, Mariel Devesa, head of product innovation for Farmers Insurance, told Mobility Buzz.

Which is why Farmers Insurance evolved its business model to include a specialized insurance program, tailor-made for rideshare drivers.

The rideshare insurance provides Farmers customers coverage when a driver turns on the ride-hailing application and during the time the driver is awaiting a match. The coverage extends a driver’s Farmers auto insurance coverage until they accept a ride, at which point their Transportation Network Company (TNC) affiliate’s — such as Uber or Lyft — commercial insurance coverage would apply.

Farmers Rideshare Insurance Coverage debuted in January of last year into seven states. Now, the coverage is offered in 29 states — with Missouri being the most recent addition last week.

Most personal auto insurance policies were not designed to provide rideshare drivers with coverage while they are working, Devesa said, because when these policies were designed, rideshare did not even exist. “When we looked at rideshare, it was really about understanding what are the periods of time, and what kind of coverage is needed,” she added.

For example, “Period 1” of ridesharing is when a driver turns on the rideshare app, until they expect a ride, Devesa explained. “Until that time, there is minimum liability coverage, which is generally $50,000 to $100,000.”

“Period 2” is when the driver accepts a ride and is enroute to pick-up the passenger, and “Period 3” is when the driver has a passenger in car, up until that passenger exits the car. Periods 2 and 3 are when the full liability limit coverage comes into play with the TNC commercial insurance — which is $1 million coverage, Devesa said.

Farmers rideshare insurance aims to fill that gap in coverage. It also enables a driver to select the coverages they’d like, including comprehensive and collision coverage that can pay for damages to their own vehicle; uninsured/underinsured motorist coverage — in case they are hit by a driver who isn’t insured or is underinsured — and medical payments coverage.

Rideshare insurance is not all Farmers is working on in the mobility sector. The company is keeping close tabs on the transportation space to further transform its insurance to meet demand.

“There is going to be a lot of changes in the next few years,” within mobility and transportation, Devesa said. “We are already seeing it, it’s going to speed up, and it’s going to accelerate. That’s one of the things that we want to stay on the forefront of, to understand where our consumers are changing their needs and how are we able to address them. With all of the shifts in mobility, including rideshare, carshare, peer-to-peer [carshare], and autonomous vehicles —  those are all things we are taking a look at.”

Those interested in learning more about the evolution of the transportation industry should join us at the second annual Auto Finance Innovation 2017 conference, May 17-18 at the Hilton Bayfront in San Diego. Visit www.autofinanceinnovation.com and to learn more.

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