Drivers for companies such as Uber and Lyft do not have to be professional drivers. They can be any person with a car and a smartphone. And while drivers may have their own personal insurance, it often does not cover business activities.
In general, drivers’ personal car insurance policies do not provide coverage when drivers are using their cars as transportation for companies like Uber and Lyft. And the companies’ insurance often does not cover them in all of their business-related activities—leaving them and other drivers at risk if they are involved in an accident.
For example, if a driver gets in an accident on the way to pick up a passenger, the company’s insurance may not cover the accident because no passenger was in the car at the time. This means that once the driver submits the claim to his or her insurance company, the insurance company could deny the claim because the driver was conducting a business activity. The ride-share company may also deny coverage because no passengers were in the car at the time of the accident. This could mean that the driver is responsible for paying for his or her own damages and injuries, as well as those of the other driver. If the driver is unable to pay, injured parties may have no recourse.