Commercial transportation isn’t what it used to be, thanks to ridesharing. Companies like Uber and Lyft provide additional options for people looking to travel short distances by automobile. But as with most new services, the law needed some time to catch up to new problems that arose in this novel industry. One such problem relates to car insurance coverage when a passenger is injured in a rideshare vehicle.
Before Uber and Lyft drivers started providing their services to consumers, the two main types of drivers on the road were commercial and personal. Commercial drivers operated everything from dump trucks to delivery vans to taxicabs. Personal drivers were people who drove not to earn a living, but to make their life easier. This included things like driving to work, running errands, and going on vacation.
Both types of drivers had their own distinct type of car insurance policies and coverage. And the general rule used to be that personal car insurance policies did not provide coverage when the driver operated a vehicle for business reasons, such as transporting goods or passengers for a fee. Additionally, commercial car insurance policies did not always protect the policyholder when a car accident took place while the driver was running personal errands.
With the arrival of ridesharing, the lines between personal and commercial driving became blurry. For example, someone could drive a personal vehicle to pick up a child from school, then 40 minutes later, they’re dropping off a paying passenger at the airport.
Ridesharing drivers faced the problem of needing both commercial and personal insurance protection. Without this protection, Uber and Lyft drivers not only faced liability they could not afford, but rideshare passengers involved in accidents often had no insurance company to rely on to help pay for any medical treatment, lost income, and other damages resulting from the crash.
In recognition of this gap in coverage—and in response to to recent state and local laws regulating the rideshare model— both rideshare companies and personal car insurance providers stepped up to help make sure that those who got hurt in a rideshare vehicle accident had some avenue of obtaining financial compensation for their injuries.
If you get hurt due to the fault of a Lyft or Uber driver, you will most likely be able to get coverage from either the rideshare driver’s personal car insurance policy or from the rideshare company’s own insurance. Which policy applies will depend on the type of insurance coverage the rideshare driver chose, and when the accident occurred.
Companies like Uber and Lyft have crafted their own policies concerning rideshare driver insurance providing. Both companies provide certain coverages during specific stages or phases of the rideshare model. (Learn more about Uber and Lyft liability for passenger injuries.)
When the rideshare app is off and the driver is not accepting customers, the driver’s personal car insurance coverage will apply. With respect to car insurance, an accident that occurs during this time will be like any other accident with a non-rideshare driver.
When the driver’s app is on and they are waiting for a customer to request a ride, Uber and Lyft will provide the following liability coverage:
If the driver is in the process of transporting a rideshare passenger, or has an assigned passenger and is en route to pick up that passenger, the rideshare company will usually provide coverage that includes:
If your accident claim involves a rideshare vehicle, another possibility is to seek compensation from the rideshare driver’s personal car insurance policy. But remember that a traditional car insurance policy will only provide compensation if the rideshare driver’s rideshare app is off and they are otherwise off-duty.
Even if the rideshare driver was in the process of picking up or transporting a paying passenger, you may still be able to recover from the rideshare driver’s personal car insurance policy, but only in two situations:
If you've been injured while riding as a passenger in a rideshare vehicle, it might make sense to discuss your situation with an experienced attorney. Learn more about finding the right lawyer for you and your Uber/Lyft passenger injury case.