Ridesharing has exploded in popularity and seems to be the wave of the future, with San Francisco-based Uber having reportedly raised $2.8 billion. Property and casualty/general insurers are enthusiastic about the potential of new business, but some are wary about the complexities of creating a combined personal and commercial plan.

“There was so much uncertainty and risk surrounding rideshare at the start, it made sense that there weren’t a whole lot of insurance companies lining up to foot the bill.  In fact, as we saw, most insurance companies refused to cover drivers completely,” said Harry Campbell, rideshare driver and blogger, according to Mark Vallet of Insurance.com.

That has changed, with many general insurers now deciding on the best way to underwrite the risks of personal policyholders using private vehicles on a for-hire basis. And some are working directly with the large ridesharing businesses (which are referred to as Transportation Network Companies, or TNCs).

Geico announced over the summer that it expanded its rideshare insurance product – which was already available to drivers in Georgia, Virginia, Maryland and Texas – to drivers in Pennsylvania. It will be available to TNC drivers for companies such as Uber, Lyft and Sidecar, says Caterina Pontoriero of PropertyCasualty360.com.

Uber, meanwhile, has partnered with usage-based auto insurance provider Metromile. Metromile is offering “variably priced, pay-per-mile auto insurance for drivers who use Uber’s ride-share platform” in selected states, according to Chris McMahon of Insurance Networking News. He notes that Uber drivers who enroll in the plan will be covered during personal drives, as well as while waiting to pick up riders.

Metromile’s plan is innovative. Uber drivers insert a Metromile dongle into their on-board diagnostic ports and driving data is sent directly to Metromile, which can differentiate between miles on a ridesharing voyage (commercial policy) and personal drives. Uber drivers are only changed for personal trips or while they are waiting for fares.

Keys for GI Insurers Looking to Enter the Ridesharing Space

Perhaps the most important part of the Metromile-Uber partnership is that the experience is seamless for drivers.

“Insurers need to be thoughtful about how rideshare drivers interact with their services,” said Dan Preston, Metromile CEO to Insurance Networking News. “It has to be a seamless experience that doesn’t require a lot of extra work.”

In addition to providing a user-friendly experience, insurers will need to possess agile policy administration systems that enable them to bring new products to market quickly to satisfy the demands of the rapidly growing and evolving ridesharing market. This includes creative plans that flexibly offer ridesharing drivers hybrid plans that cover their personal and commercial trips.

And in today’s Big Data era, insurers must be able to sort through the mountains of data produced by initiatives such as ridesharing, extract the actionable insights, and then quickly take action.

Ridesharing is booming and is a potentially lucrative market for insurers who are ready to capitalize.