Insurance Coverage for Rideshare Drivers

lyft mustacheThere has been increased discussion lately on what insurance coverage is afforded to drivers who work for ‘transportation network companies,’ after a driver for Uber struck and killed a six-year-old in San Francisco on New Year’s Eve. Although the company issued a statement expressing regret for the accident, it said that, although the driver had completed a trip arranged by Uber earlier in the day, when the driver hit the girl he was not providing Uber services, and was therefore not covered under any of the insurance that Uber provides.

UberX, along with Lyft and a few others, are transportation network companies that use online platforms to connect passengers with drivers using personal vehicles. These businesses offer people opportunities to meet up with others who are willing to drive them for a ‘donation’ via an online platform that matches the passenger’s needs to the driver’s needs. Using a ride-share service like this is significantly cheaper than hiring a traditional cab, and the business offers everyday people with a car the opportunity to make a little extra money.

Insurance Coverage

Although these Transportation Network Companies are required to maintain liability insurance, coverage for medical payments and collision insurance does not exist against uninsured or underinsured drivers. These policies are discretionary, which leaves many drivers that work for companies like Uber having to foot the bill for any car damages caused by underinsured or uninsured drivers, or even injuries the driver may have suffered in an accident.

Further, it has recently been discovered that insurance companies are dropping people from their individual policies if they discover the driver is working for a transportation network company. This puts drivers in a tough spot. They cannot make a claim through the company for which they work, and if they make a claim through their own personal insurance, they may not only be denied, but may lose their coverage altogether.

The Department of Insurance in California recently published a notice stating that people could lose insurance coverage, and may not have coverage in certain incidents involving a car accident, if the driver works for a transportation network company.

Transportation Network Companies Respond

In response, these companies have created the Peer to Peer Rideshare Insurance Coalition to cooperate with new businesses in the industry and insurance companies to find new strategies for insuring drivers.

Lyft also recently announced it plans to provide extended insurance for drivers, with a $50,000 maximum collision insurance, $1 million worth of coverage if a driver is hit by an uninsured motorist who is at fault, and $1 million worth of coverage if a driver is hit by an underinsured motorist who is at fault.

Everyone knows that California is the testing ground for all things technology related, and it seems like transportation network companies will continue to grow across the United States. Regardless, though, driving without full insurance is not only dangerous, but can cost you a ton of money. If you want to know more about these rideshare companies and how they operate in California, or if you think you have a claim due to an accident in connection with a ride share program, contact the Appel Law Firm today.

Photo Credit: Tribute/ Homenaje cc

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