by Bernard D. Nomberg, Partner, The Nomberg Law Firm
After attending your friend’s birthday party across town, you “call” an Uber* to take your group home. This seems like the responsible thing to do. Your Uber driver arrives, picking up your group and starts the drive home. Within a few minutes, a crash occurs and you are taken to the hospital. Who is responsible for your injuries?
Ridesharing has become increasingly popular over the last couple of years due to the convenience and reliability. What is not as clear to the many rideshare users is the role of automobile insurance when a rideshare driver has an automobile accident. Does Uber have an accident policy? Should the Uber driver have a separate automobile insurance policy to cover passengers? Do you need to obtain a third party insurance?
Legal liability is not clear with ridesharing programs. Uber and Lyft both have an accident policy to cover both drivers and riders. So yes, technically you are insured when riding in an Uber or Lyft, but what does their policy cover? Both Uber and Lyft have liability coverage with a $1,000,000 bodily injury limit for drivers and riders. However, this policy is only applicable in specific situations, as outlined in the insurance policy. For example, the drivers need to be aware that they are not given full coverage. The company’s full insurance policy is only activated upon picking up a rider. However, if the driver has not connected with their Uber rider, the insurance policy limits might be applicable only up to $50,000.
Many drivers may expect their personal auto policies to cover them when transporting passengers but this is not the case. Keep in mind, rideshare drivers are not employees but rather independent contractors acting as commercial drivers by taking paying passengers in their vehicles. In most instances, the driver’s personal auto insurance policy will become invalidated or sometimes even canceled if their insurance company finds them driving for a ridesharing program. Most personal auto insurance policies prohibit coverage for commercial use, unless the insurer knows about it in advance and modifies the policy accordingly. Many drivers will not contact their insurance company because they will then be charged more for their auto policy. Because of this, if you are an Uber driver, your personal auto policy will likely not pay for your injuries. Although it has an added cost, rideshare drivers should purchase a commercial ridesharing insurance policy.
Additionally, riders are at risk if the driver lacks proper insurance coverage to for their commercial driving business. If the ridesharing driver lacks coverage, a passenger could be saddled with expensive medical bills. Riders should be aware that several companies offer insurance for passengers riding in one of the various ridesharing programs. For example, RideSafe connects to the individuals’ Uber or Lyft app. With RideSafe, rather than paying as you would for a regular automobile policy, the rider pays $2.40 for 24 hours of coverage while a passenger in one of the ridesharing applications.
These are just two of the more prominent legal issues that arise from rideshare programs. Determining legal liability in rideshare accidents is complicated. As a passenger, you will likely be covered under the company’s policy, however, the policy is only activated in very limited situations. The driver’s personal automobile policy will not apply, unless, they have a separate commercial policy. Be aware of the consequences of riding in a ridesharing program and getting in an accident.
If you have been involved in an auto accident as a passenger or driver of a ridesharing program such as Uber or Lyft, please call us today at (205) 930-6900 to discuss your rights.
*While Uber is mentioned more often in this paper, we are referring to any of the well-known rideshare programs, including Lyft and others.
Bernard D. Nomberg has been a lawyer for more than 20 years. Bernard has earned an AV rating from Martindale-Hubbell’s peer-review rating. He has been selected a Super Lawyer by Super Lawyers Magazine as well as a Top Lawyer by B-Metro Magazine. Bernard is the immediate past Chair of the Alabama State Bar’s Workers’ Compensation Section.