What Is the Livery Exclusion in Auto Insurance?
What Is the Livery Exclusion in Auto Insurance?
The livery exclusion is a provision in a personal auto policy that removes coverage when the vehicle is being used to transport people or property for compensation. It is the reason most standard personal auto policies do not cover Uber, Lyft, DoorDash, Amazon Flex, or similar commercial driving activity.
What does the standard policy language say about the livery exclusion?
The ISO PP 00 01 personal auto policy form (2018 edition), which most personal lines carriers use as the base for their auto policies, excludes coverage “while the covered auto is being used to carry persons or property for a fee or compensation.” Under the 2018 revision of this form, the exclusion attaches at the moment the transportation network company app is activated, whether or not a passenger or delivery order is in the vehicle. Earlier editions of the form had the exclusion trigger at passenger pickup; the 2018 revision moved the trigger earlier to app login. For example, a driver who turns on the Uber app at home before leaving for a first pickup is already in an excluded period before the car pulls out of the driveway.
Why does the livery exclusion matter for rideshare and delivery drivers?
A driver who logs into the Uber driver app while personally commuting to a coffee shop is, under the ISO PP 00 01 form, already in an excluded status. If an accident occurs during that commute while the app is active, the personal auto insurer may deny the claim on livery exclusion grounds.
The exclusion is not unique to rideshare. It applies equally to any for-hire transportation activity: pizza delivery, courier services, app-based delivery driving, non-emergency medical transportation, and any other arrangement where the vehicle earns compensation by carrying goods or passengers. For example, a courier who uses a personal vehicle for same-day package deliveries and is rear-ended during a run may find their personal insurer denies the claim on livery exclusion grounds.
What does the livery exclusion not affect?
The livery exclusion does not affect coverage when the app is off and the driver is using the vehicle purely for personal purposes. It also does not affect UM/UIM coverage that pays the insured when a third party is at fault, in most policy forms, though coverage period disputes can complicate UM/UIM claims for rideshare drivers as well.
How does a rideshare endorsement address the livery exclusion?
A rideshare endorsement, sometimes called a TNC endorsement or transportation network company endorsement, is an add-on to the personal auto policy that modifies the livery exclusion for app-based rideshare activity. It restores coverage during Period 1 (app on, no passenger matched), so the driver has collision, comprehensive, and UM/UIM coverage during the gap between personal coverage and platform coverage. Georgia O.C.G.A. § 33-1-24(g)(2) expressly authorizes personal insurers to apply the exclusion to TNC activity – meaning Georgia drivers who want continuous coverage must carry both a platform endorsement and a personal auto policy that includes a rideshare endorsement.
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