Does your accident involve a Rideshare company such as Uber or Lyft?  Were you the passenger? Were you the other vehicle? What if the driver was on his way to pickup a passenger? Is there insurance coverage in these situations?  It depends. As millions of people use rideshare companies to get around, there is a lack of understanding of what happens and the potential issues arise when being injured due to a rideshare accident involving a driver from a rideshare company. Rideshare companies such as Uber and Lyft have transformed the public transportation industry.  Riders love the low cost, the convenience, the choices (luxury vehicle, SUV, fuel efficient vehicle), the overall friendly service and ability to rate their drivers.

When ridesharing companies first started about ten years ago, it was common practice for their drivers to use the driver’s own personal insurance policies for accident coverage. The problem with this practice was that most personal insurance policies did not cover the driver or their passenger(s) if the driver was operating the vehicle for commercial use. This left the victims of these accidents without a source of recovery.

As more serious accident began to occur, such as the death of a California woman while riding in a Lyft vehicle outside of Sacramento in 2014; rideshare companies and their drivers began to be more closely scrutinized by the public. The conversation about who was ultimately responsible for coverage (the driver or the rideshare company) forced changes in the industry.

Ridesharing companies such as Uber and Lyft now provide their drivers with a $1 million dollar liability policy in the event of an accident. This means that the driver and their passenger(s) may be covered for damages. However, it is not that black and white. The coverage still depends on a variety of factors.

Both Uber and Lyft cover their drivers with a three-part insurance plan, which states:

  1. Driver Mode Off: If the rideshare driver is not driving for Uber or Lyft at the time of the accident, their personal insurance policy will provide liability coverage for accidents caused by the driver. This means the $1 million dollar policy does not apply.

Many insurance companies now offer specific coverage for rideshare. However, it is up to the rideshare driver to look into their personal insurance and add rideshare coverage to their  policy. If the driver fails to do so, they could be personally liable if they are involved in an accident.

  1. Driver Mode On Without a Passenger: If the rideshare driver has the driver mode on and is waiting for a ride request when they are involved in an accident, the driver is covered under both Uber and Lyft’s contingent liability coverage. The contingent liability coverage is used in the event the driver’s personal insurance does not provide coverage or does not provide enough coverage. Lyft’s contingent liability coverage is $50,000.00 per person or $100,000.00 maximum per accident and $30,000.00 for property damage.

However, some states, including California, have created legislation (Assembly Bill 2293) to mandate a higher excess liability coverage when accidents occur during this phase of a  rideshare driver’s employment.  In 2015, California mandated that third-party liability insurance covering the costs of injury, death, and property damage must be at least $200,000.000.

Additionally, the law clarifies that driver’s personal insurance can no longer cover this time period.  It must be covered by the rideshare company.  The new regulations have been put into place to prevent ridesharing companies from claiming their insurance policies should not kick in because drivers have personal coverage.

  1. Driver Mode On With a Passenger: If the rideshare driver has the driver mode on and is driving a passenger at the time of the accident, the driver and the passenger are generally covered by the ridesharing company’s liability coverage. Both Uber and Lyft have $1 million dollar liability coverage policies as well as $1million dollars in uninsured and underinsured coverage.

Rideshare accidents may be complicated, involve multiple insurance companies and need expert investigators.

If you have been involved in an accident involving a rideshare company it is important to contact an attorney at Negretti & Associates for a free consultation.