More and more people are opting not to drive their own vehicles or they have chosen not to purchase a car altogether due to the explosive growth of car sharing and ridesharing services—convenient and affordable alternatives for getting around town. In fact, these services have become so popular here in Northern Virginia and D.C. that there are many avid users of Zipcar and Car2go (car sharing services that are alternatives to standard rental cars) as well as Uber and Lyft (ridesharing services that are alternatives to taxis).
Understanding Ridesharing Services
Ridesharing services are a newer alternative to traditional taxis. Although they operate in a similar matter to taxis, Uber and Lyft rides are more flexible and convenient due to their on-demand smartphone apps. For example, a person can pull up the Uber app on his smartphone and request a ride and (generally within seconds) have a driver accept the request and provide him with an ETA.
Although Uber and Lyft are perceived by the public to be faster, more convenient, cheaper, and safer than taxis, car accidents still happen. And when they do, it is important that people involved in crashes with ridesharing vehicles understand their coverages. Uber and Lyft do not have a pool of company cars, rather they work with independent contractors who drive their own personal vehicles. Because of this, the insurance coverage surrounding car accidents can be confusing.
Understanding Accident Liability Insurance Coverage
Ridesharing companies such as Uber and Lyft provide each of their drivers with a one million dollar liability policy in the event of an accident. This means that the driver and his or her passenger(s) may be covered for their injuries and losses; however, the coverage depends on what the driver is doing at the time of the collision. This is because Uber and Lyft have a three-part insurance plan, which is as follows:
- Not driving for Uber or Lyft at the time of the accident. Rideshare drivers who are not available to pick up passengers have their driver mode turned off. If a pedestrian or car accident occurs during this time, the driver would need to contact his personal auto insurance for coverage. This means that if someone else was injured by the driver, that person would need to pursue a claim with the driver’s personal auto insurance and not with the ridesharing company.
- In service, but had not picked up a passenger at the time of the accident. This means that a driver was waiting for a ride request to transport passengers when the collision occurred. In this situation, both Lyft and Uber have contingent liability coverage in the event the driver’s personal insurance doesn’t provide coverage or doesn’t provide enough coverage. For example, Lyft’s contingent liability coverage is $50,000 per person or $100,000 maximum per accident (which is very similar to Uber’s contingent liability coverage). While this may sound like a lot of money, this may be just a fraction of what medical bills and lost wages could be when serious injuries are involved.
- Driving a passenger at the time of the accident. When an accident occurs as a driver is transporting a passenger, the driver and passenger are generally covered under the ridesharing company’s liability coverage. Both Uber and Lyft have one million dollar liability coverage policies as well as one million dollars in uninsured and underinsured insurance coverage, which means that even if another driver caused the accident and didn’t have insurance or enough insurance, the ridesharing company’s policy should cover the injuries and losses. But beware that insurance companies are always looking to pay out as little money as possible. So even though the coverage may be there, you might have to fight to get fair compensation.
When an accident occurs involving a Lyft or Uber driver, there could be multiple insurance companies involved including the driver’s personal insurance, your own insurance and the ridesharing company’s insurance. This is why things can get complicated really fast. In addition, most insurance companies don’t offer fair compensation for injured victims, which is why those who are injured in auto accidents—especially those who are seriously injured—need to contact a personal injury attorney who has experience standing up to large insurance companies. We know what it takes to get our clients maximum compensation for their losses, and we would be honored to fight for you. Call us today for a free consultation.