Uber and Lyft Drivers May Not Be Fully Covered by Insurance

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 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.

Companies such as Uber and Lyft allow customers to get rides by using their mobile phones. These companies, sometimes called transportation network companies, or TNCs, have generally escaped the regulations required of taxis. The companies argue that they are not transportation providers, but instead, they license their apps to transportation providers. However, this insurance system often creates a gap in insurance for drivers.

One Insurance Company Provides New Option for Uber Drivers

One insurance company recently announced that it was offering a new insurance plan for drivers in Tennessee. According to one news source, the plan is an attempt to cover insurance gaps for Uber drivers when they are using their personal cars to drive customers. The companies often provide coverage while customers are in the car or on the way to pick up a customer, but they may provide lower liability coverage between trips, or no collision coverage at all.

The new coverage generally provides coverage to drivers who are transporting customers for these companies but are not covered by the company’s insurance. State Farm stated that this new service allows the company to meet customers’ needs and provide them with peace of mind.

Drivers and Passengers at Risk

This type of insurance coverage is not available in all states or locales. Without the availability of such coverage, Uber and Lyft drivers and other drivers may be at risk. This means that Uber drivers, as well other drivers and passengers, may not be able to recover compensation for their injuries if they are involved in an accident. If someone is injured, and the accident occurred outside the scope of the defendant’s personal insurance and the company’s insurance, there may not be anyone who can pay the bill.

Have You Been in a Car Accident with an Uber or Lyft Driver?

If you have been in a car accident with an Uber or Lyft driver, or if you drive for a ride-share company, it is important to figure out which insurance applies. State laws and insurance coverage vary, so figuring out who is liable will let you know whom you should be suing. At Moll Law Group, our attorneys have experience representing accident victims and dealing with insurance issues. Our Illinois personal injury attorneys are available to help you file your claim and seek the compensation you deserve. Call us at 312-462-1700 or fill out our contact form to arrange a free initial consultation.

See More Posts:

Spring 2016 Moll Law Group College Scholarship Winner is . . ., Illinois Injury Lawyer Blog, April 18, 2016.

Evidence of Lack of Insurance Determined Irrelevant in Car Accident Claim, Illinois Injury Lawyer Blog, April 30, 2016.

Court Considers Causation Issues in Defective Gun Case, Illinois Injury Lawyer Blog, March 8, 2016.