CUNA Mutual began offering a no-cost endorsement Oct. 14 that protects client credit unions from losses they could incur if a member crashes a financed car while driving for Lyft, Uber or another transportation network company.
TNC firms such as Lyft and Uber have taken off in recent years, riding a wave of public dissatisfaction with taxis and familiarity with mobile phone technology that supports the app-based services.
When announcing the TNC endorsement, CUNA Mutual honed in on the fact that neither the TNC's insurance nor the drivers' personal auto insurance may cover on-the-job accidents, leaving credit unions potentially at risk for losses.
"TNC drivers might think their personal insurance will cover them if they are in an accident while 'on the job,' but that may not be the case," CUNA Mutual Staff Underwriting Specialist Al Olson said. "If physical damage occurs and there is no insurance coverage, the likelihood of drivers defaulting on their auto loans increases, which creates a potential loss exposure for lenders."
Although a credit union may have collateral insurance in force to protect their loan portfolio, standard collateral insurance coverage excludes vehicles being used for "public or livery conveyance," Olson said.
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