Insurance coverage for Uber and Lyft drivers and other ride-sharing app drivers is confusing to understand amidst a rapidly developing industry. We have written about this issue before, and the policies keep changing. Legislation passed in Rhode Island and Massachusetts in 2016, and in 45 other states, requires ride-sharing companies to provide generous coverage when ride-share drivers have customers in their vehicles, but there are still gaps in coverage. Meanwhile, insurance companies are trying to capitalize on selling endorsements to cover those gaps for what they say are the broader risks of ride-sharing drivers who put on more miles and spend more time in unfamiliar neighborhoods, according to the Wall Street Journal.
State Minimum Personal Auto Insurance Requirements
In every state, drivers must carry minimum personal auto insurance limits:
- In Rhode Island, drivers must carry bodily injury liability coverage of $25,000 per person/$50,000 per accident; and
- In Massachusetts drivers must carry bodily injury to others of $20,000 per person/$40,000 per accident, as well as $8000 in PIP coverage per person per accident, uninsured motorist coverage of $20,000 per person/$40,000 per accident, and $5000 for property damage to others.
Ride-Sharing Insurance Coverage
Since ride-share drivers use their personal vehicles on the job, coverage gets confusing when drivers are logged into a ride-sharing app. If a ride-share driver is in an accident on the job, does Uber or Lyft provide coverage? And/or will the drivers’ personal auto policy cover claims?
There are three periods of coverage provided by Uber and Lyft:
Period 1: driver is logged in and waiting for rideshare requests
- Uber/Lyft Coverage: $50,000 injury/$100,000 total/$25,000 property, but no collision
Period 2: driver has accepted a request and is en route to the customer
- Uber/Lyft Coverage: $1 million liability, but very high deductibles
Period 3: driver has customer in the car
- Same as Period 2.
While Period 2 and 3 coverage is generous – and in our experience dealing with insurer James River Insurance, settlements can also be generous – drivers should know that their deductibles are high – $1000 for Uber and $2500 for Lyft. And for accidents in Period 1, coverage is limited and there is no collision coverage for the drivers’ vehicle.
To further confuse things, personal auto insurance companies are still developing their positions on how personal policy coverage applies in ride-share accidents. Coverage varies, but many companies take the position that personal insurance coverage stops when the ride-sharing app is turned on. For example, in a late 2016 accident that occurred while a driver was in Period 1, American Family Insurance initially denied personal auto insurance coverage and then changed its position and covered the drivers’ losses, as the Uber and Lyft policies did not cover the damage to her vehicle.
There are also reports that some companies are dropping insured ride-share drivers upon learning of their ride-share activities, according to the RideShare Guy and other online sources.
Additional Coverage Options
Insurance companies are starting to capitalize on this rapidly changing industry by offering endorsements to cover gaps in coverage. For example, some companies sell “Period 1 Endorsements” to cover the gap in Period 1 coverage. Others offer hybrid personal/commercial policies. The extra cost varies, about $150 extra per year for GEICO hybrid policies according to the Nerd Wallet. However, not all companies offer endorsements, and some states do no provide ride-share coverage. Until the industry catches up with the changing times, ride-share drivers need to educate themselves about their own policies and the rules in their states on coverage.
Contact The Bottaro Law Firm, LLC Today
At the Bottaro Law Firm, LLC, we represent ride-share drivers and passengers on claims from accidents due to the negligence of others. Recovery has included medical costs, lost wages (including lost ride-share income), deductibles, out-of-pocket costs, and the pain and suffering that our clients experience putting their lives back together after an accident.
If you are a ride-share driver or passenger, we can help you navigate the confusing issues of insurance coverage for Uber and Lyft drivers. Contact us today, 24/7, to discuss your accident free of charge.