The vast majority of people using ridesharing apps don’t ask themselves as they get into an Uber or Lyft, “if I get into an accident, whose insurance will cover my injuries? What if there isn’t enough coverage or any insurance at all?” We also commonly see situations where an Uber or Lyft strikes another vehicle or pedestrian. What happens then?
These are important questions that the team at Monsees & Mayer is often asked by friends, family, and clients. Fortunately, recent law changes and the implementation of new regulations are helping to ensure that you are covered by insurance in the event of a collision involving an Uber or Lyft driver. Here’s a basic overview of how it works:
- Period 1: The Uber or Lyft driver has his/her app “ON”, but does not yet have a ride request.
- This “period” has been an area of great conversation because it was initially considered a “gap” period in which there was no insurance coverage. In some states, this may still be the case.
- If an Uber or Lyft driver causes a collision with another vehicle during Period 1, generally the driver’s personal insurance provider would deny coverage since the vehicle was being used for a business purpose. Likewise, Uber/Lyft may not provide coverage since the driver does not yet have a passenger. Fortunately, states are beginning to pass laws requiring Uber/Lyft to procure insurance coverage during Period 1, typically for a reduced coverage amount around $50,000 per person.
- In those states not requiring Uber/Lyft to provide insurance during Period 1, you would have to turn to your own insurance company for what is referred to as “uninsured motorist coverage” or UM.
- Period 2: The driver has been notified of a ride request and is in route to pick up passengers.
- In most states, Uber and Lyft are required to provide coverage limits of $1,000,000 in the event of bodily injury. Since there are obviously no passengers at this point, this insurance coverage would apply in the event the Uber or Lyft driver is at-fault in causing a collision with another vehicle.
- Period 3: The driver has picked up his passengers and they are in route to the destination.
- Same insurance coverage as Period 2. Uber and Lyft must provide insurance of $1,000,000 per person.
- In periods 2 and 3, Uber/Lyft now also must carry “uninsured” and “underinsured” coverage of $1,000,000. This coverage would apply, for example, if your Uber/Lyft is struck by another vehicle whose driver either (a) has no insurance coverage (“uninsured”) or (b) not enough insurance coverage to cover your injuries (“underinsured”). These coverages may also apply if an Uber/Lyft driver causes a collision with your vehicle and you are injured.
Also consider that if you are an Uber or Lyft driver and the app is turned “OFF”, your personal auto policy is the only insurance coverage available. Uber/Lyft insurance does not apply. Further, individuals driving Uber/Lyft now have the option of purchasing additional insurance commonly referred to as a “ridesharing endorsement.” Depending on what state(s) you drive in, it is a good idea for a driver to explore a ridesharing endorsement to ensure they are covered in the event of a collision during Period 1, or simply so they have “excess” coverage in the event of a serious or deadly accident.
Determining whether an Uber or Lyft driver that has caused a collision has any coverage at all or excess coverage, however, and whether that coverage applies to your injuries, can be complicated. If you or a family member is involved in a ridesharing accident, the worst thing you can do is to try and resolve your insurance dispute on your own. It is in your best interest to contact an attorney right away. The team at Monsees & Mayer is ready to help.