Progressive Insurance successfully blocked a claim for uninsured motorist coverage after a Lyft passenger’s accident, thanks to a key policy exclusion in New York City.
On August 13, 2025, the Appellate Division, Second Department, of New York’s Supreme Court handed down a decision with important implications for insurers navigating the evolving ride-share and for-hire vehicle landscape. The case, Matter of Progressive Ins. Co. v Service, centered on whether Progressive was required to provide supplementary uninsured motorist (SUM) coverage to a passenger injured in a Lyft vehicle operating within New York City.
The dispute began with an accident on August 21, 2021. Shante D. Service was a passenger in a car driven by Artur Nazaryan, who was working for Lyft at the time. While traveling on the Van Wyck Expressway, Nazaryan’s vehicle was struck by another car. At the time, the vehicle was insured by Hereford Insurance Company, which included SUM coverage, and Lyft also carried a policy with Progressive that offered similar coverage.
After the accident, Service sought uninsured motorist benefits from Progressive. The insurer denied the claim, citing policy language that excluded certain vehicles from coverage. In July 2023, Service served Progressive with a demand for arbitration. Progressive responded by filing a proceeding under CPLR article 75, seeking to permanently stay the arbitration.
The heart of the case was a close reading of Progressive’s policy language and how it interacted with New York City’s legal definitions. The policy provided SUM coverage for “TNC vehicles” – those used by transportation network company drivers providing prearranged services originating in New York State. However, the policy specifically excluded coverage for vehicles classified as “for-hire” under New York City Administrative Code § 19-502. This code defines a “for-hire vehicle” as any motor vehicle carrying passengers for hire within the city, a definition that includes many ride-share vehicles.
The court found that, at the time of the accident, Nazaryan’s vehicle was being used as a “for-hire vehicle” because he was carrying a passenger for payment within New York City. As a result, the vehicle did not qualify as a “TNC vehicle” under the policy’s SUM endorsement, and Service was not considered an “insured” entitled to coverage. The appellate court reversed a lower court’s earlier denial and granted Progressive’s request to permanently stay arbitration of the claim.
For insurance professionals, this case is a clear reminder of the importance of precise policy drafting and a thorough understanding of local legal definitions. As ride-share and for-hire vehicle services continue to grow in urban markets, insurers face increasing pressure to clearly define the scope of coverage in their policies. This decision highlights how a well-crafted exclusion can protect insurers from unintended liabilities, especially in complex metropolitan environments where transportation services often overlap.
The ruling also signals to brokers, underwriters, and claims professionals that courts will closely scrutinize policy language and its alignment with local statutes. For those in the business of insuring ride-share and for-hire vehicles, the outcome reinforces the need to stay current with regulatory changes and to ensure that policy terms are updated accordingly.
While the case did not involve a large payout or a major corporate dispute, its impact is significant for the insurance industry. It clarifies how SUM coverage applies to ride-share operations in New York City and sets a precedent that may influence future coverage disputes in other urban markets. For insurers, the message is clear: attention to detail in policy wording can make all the difference when claims are contested.
