The ridesharing companies Uber and Lyft have revolutionized transportation in many regions of the U.S., replacing taxis and other traditional modes of travel. Like taxi drivers, Uber and Lyft drivers are not employees of Uber and Lyft, and the companies do not own their cars. The main differences from taxis involve pricing structure and the process of obtaining an Uber or Lyft ride. Passengers hire an Uber or Lyft driver through an app rather than on the street. However, the technological nature of the ridesharing services may not have a significant impact on determining liability and getting compensation after an accident.
You may have up to three different options for insurance coverage if you have been injured while riding with an Uber or Lyft driver. One option is using the individual coverage of the Uber or Lyft driver, but this is rarely applicable. Most ridesharing drivers do not have a commercial insurance policy or a provision in their personal car insurance policy that covers injuries to passengers when they are working for Uber or Lyft. To the contrary, insurers usually include business use exclusions in personal car insurance policies, which would exclude injuries caused when the policyholder is working as a driver for profit.
If another driver was at fault for the accident, you may have access to their policy to cover your injuries. You could make a third-party insurance claim to their insurer and file a personal injury lawsuit if they are unwilling to pay out. This may be good enough if the accident and your injuries are relatively minor, and the at-fault driver has adequate coverage. Sometimes, however, their coverage is not enough to fully compensate a victim.
Ultimately, if you have been involved in a serious accident while you were a passenger of an Uber or Lyft driver, you probably will need to make a claim against the ridesharing company’s third-party liability insurance. Both Uber and Lyft provide up to $1 million for injuries and property damage in an accident, and they provide the same amount through their uninsured/underinsured insurance coverage. Uber and Lyft coverage takes effect only once you have exhausted the ridesharing driver’s individual insurance, if any. If you are making a claim against the ridesharing company’s UM/UIM coverage, you will need to show that the at-fault driver did not have enough insurance, did not have enough insurance to compensate you for your injuries, or was not identified (a hit and run driver).
If an Uber or Lyft driver hit you when you were in another vehicle, you can pursue a claim against the liability coverage of that driver. This will be similar to most ordinary car accident claims. Since the driver’s individual policy probably does not cover accidents when they are driving for profit, you can expect to end up making a claim against the ridesharing company’s insurance policy. The situation is straightforward if the Uber or Lyft driver was carrying a passenger for hire at the time of the crash. When this happens, Uber or Lyft insurance coverage for injured people in other cars extends to $1 million.
Complications can arise if the driver was not carrying a passenger who hired them through the app. If a driver happens to drive for Uber and Lyft but is not logged into the app at the time of the crash, Uber or Lyft coverage does not apply. However, the driver’s individual coverage probably applies and would be your main recourse.
If the driver is logged into the app but has not accepted a ride, a limited amount of Uber or Lyft coverage may apply. This amounts to $50,000 for each person injured in the accident, up to a total of $100,000, as well as $25,000 in property damage. You would need to make a claim against the driver’s individual policy (if available) and then use this coverage to supplement it.
This usually is not an option because, as noted above, Uber and Lyft drivers are considered independent contractors rather than employees of the ridesharing companies. As a result, vicarious liability does not apply in most states, although the situation is blurry in California. Uber and Lyft have carefully distanced themselves from their drivers and shielded themselves from any allegations of direct liability for an accident. Fortunately, suing Uber or Lyft should be unnecessary in most cases because their insurance policies should cover most injuries.
