As the industry keeps changing, it's important to know a company's "pedigree."
Auto insurers are working on a new and potentially important type of policy for drivers who cruise around town in their cars -- some of which are emblazoned with pink mustaches -- trying to make a few extra bucks.
One of the recent complaints against Lyft and Uber -- the ride-sharing companies that recently debuted in Austin and use mobile phone applications to connect participating drivers with paying passengers -- is that their drivers often don't have the necessary insurance coverage. But that all could change in the coming months.
Cab drivers, who see the ride-sharing companies as a threat to their livelihoods, have embarked on a campaign to raise awareness about the possibility that passengers of ride-sharing cars -- Lyft cars are marked by a pink mustache on the car grill; Uber cars are unmarked -- might not be covered in the case of an accident.
But the cabbies' argument might fall flat in the future.
Loretta Worters, a spokeswoman for the New York-based Insurance Information Institute, said insurance companies are considering creating innovative products designed to address the burgeoning ride-sharing industry. Auto insurers see an opportunity to fill in a gap with a new kind of policy or add-on that would cover drivers and passengers using the technologies by Lyft, Uber and other companies.
Mark Hanna, a spokesman for the industry group the Insurance Council of Texas, said insurance companies across the U.S. are looking to state regulators and legislatures for guidance as they prepare to offer expanded policies.
"Everyone is trying to come up with a solution," Hanna said.
California might be the place where model legislation or regulation will be crafted.
Pete Moraga, spokesman for the Insurance Information Network of California, said lawmakers in the California Assembly and state Senate are working on bills, and state insurance regulators are pondering new regulations.
In Texas, insurance regulators haven't made much progress in dealing with ride-sharing companies.
Texas Department of Insurance spokesman Jerry Hagins said that state law requires auto liability coverage, but it doesn't distinguish between personal and commercial coverage, and local municipalities must set requirements for insurance for taxis and livery operations.
So far, Austin city officials have deemed Lyft and Uber to be operating as illegal and unpermitted taxis. Officials have gone so far as to impound vehicles and ticket drivers.
Hagins also said that most insurers offering personal auto policies do not rate their policies for commercial uses.
Patti Kelly, a State Farm spokeswoman, confirmed that Uber and Lyft drivers in Texas generally wouldn't be covered by their personal policies while earning extra money shuttling people around.
Both Uber and Lyft have liability policies that insure drivers who take on passengers under their name. But they are supposed to pick up where personal polices leave off, the companies have said.
Advice from the Texas Department of Insurance echoed the guidance from the Insurance Information Institute: Call your insurance company to confirm you're covered.
Joe Stephens, a 31-year-old Austinite and Uber driver, said he doesn't worry too much about his insurance coverage -- or the city regulations that make his side job as a driver illegal.
Earning about $2,000 a week driving people around Austin in his Mercedes, Stephens said he presumes he is covered by Uber in the unlikely event of an accident.
But given the opportunity to supplement his personal insurance with an add-on or additional policy -- as long as it is reasonably priced -- Stephens said he'd jump at it.
"I think it definitely would be the smart way to go," he said.
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