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Ridesharing Insurance, Liability for Uber, Lyft and Others Explained

January 13 2017 | Blog
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    Ridesharing has had tremendous transformative effects on the way we travel, both good and bad. The good comes from convenience and a flexible employment model. The bad comes from uncertainty over the way these changes affect and conflict with current laws and policies.

    How insurance covers ridesharing drivers is one of the biggest concerns for all the market players, including drivers, passengers and others on the road. When services like Uber, Lyft and Sidecar first debuted, many insurers were quick to denounce claims for accidents since drivers were acting as commercial drivers on-the-clock for their respective company.

    Since then, new regulations and rideshare-friendly insurance policies have debuted. Drivers, passengers and others on the road have far less risk than they once did, but large gray areas still exist. Most notably, companies like Uber can deny claims from their commercial insurance policy if they feel they can push fault completely onto the driver, who is not necessarily their employee.

    If you are worried about the implications of getting injured during an Uber or Lyft ride or injured by a driver working for these services, read on for our explanation of how many of these incidents may work.

     

    Three Phases of Ridesharing Insurance

    One of the most inescapable and interesting aspects of this field is how drivers are actually able to switch on and off their services at the drop of a hat. They can be driving to the grocery store one minute and decide to pick up some passengers the next.

    Because of this fluidity, legislators, insurers and the companies themselves have designated three distinct periods depending on whether the driver is actively engaging in ridesharing services or not:

     

    • Situation: Driver is using their car for personal use. Their Uber/Lyft/etc app is not active.
    • How Insurance Works: Driver’s personal car insurance policy covers all property damage, medical costs and other liability.

     

    • Situation: Driver has turned on the Uber/Lyft/etc. app and is waiting for ride requests in their area.
    • How Insurance Works: Driver’s personal car insurance covers the maximum amount possible for property damage and bodily injury. Losses in excess of this policy or for situations not covered by this policy can be covered by the rideshare company’s contingent liability policy with 50/100/25 limits.

     

    • Situation: Driver is en route to pick up a designated passenger or is currently carrying one.
    • How Insurance Works: Uber/Lyft/etc commercial insurance can provide up to $1 million in liability coverage as well as a possible $1 million for underinsured/uninsured drivers involved in the accident.

     

     

    Why Ridesharing Accidents Could Still Cause Issues

    Even with these policy limits set in place, passengers and others on the road are not automatically covered by an insurance policy if an Uber or Lyft driver gets in a wreck with them.

    For one, the commercial policies are owned and managed by the ridesharing companies themselves. Since these companies fight vehemently in court and in front of policymakers to deny that drivers are their employees, they can easily try to lay blame upon the driver rather than themselves in certain situations. For instance, if they allege the driver was intoxicated or distracted, they can argue they are not liable.

    Secondly, since these policies are held and managed by the corporations, they and their insurers may do everything in their power to deny your claim. Your driver’s personal policy may also not cover commercial activities depending on how it is structured.

    You can reduce these headaches by hiring a personal injury attorney in Nashville, Louisville or other areas nearby to represent your claim and fight on your behalf for rightful compensation.

    If you have been injured by an Uber driver, Lyft driver or other ridesharing driver, do not hesitate to pursue your claim. Contact us today using the number above or the quick form to the right, and you will receive a free consultation to start your claim today.

     

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