Car accidents and insurance issues with Uber (or Lyft)
Updated: May 22
Starting in 2009, Uber began operating on the west coast, and now operates in over 10,000 cities all over the world. Uber is similar to a typical taxi in many respects but if an Uber driver is involved in an accident, the insurance coverage that applies differs quite a bit from the typical taxi insurance coverage.
What does a traditional taxi have for insurance? Generally, taxis have insurance coverage similar to most other insurance policies. There are certain limits of liability for different types of coverage – for example, collision coverage, “no-fault” coverage for medical bills, bodily injury coverage, etc. These coverage limits are static. They do not change based on what the taxis is doing, or whether or not a rider is in the taxi.
Uber, however, structures its insurance differently. There are 4 separate events that focus on how a driver is using his/her car and each event triggers certain insurance coverage. (Ride sharing (e.g., Uber, Lyft) insurance coverage is regulated and mandated by the state of Massachusetts.) I am going to focus on coverage directly available to an injured person, whether a pedestrian or passenger in the Uber, rather than on coverage available for other losses (like medical bills, or property damage). Keep in mind that the coverage for other losses may (and likely does) also change depending on how the driver is using his/her car.
The first event is where the driver is signed up as an Uber driver, but has not turned on his/her Uber app. During this time, the driver’s own personal insurance policy applies. The minimum coverage allowed in Massachusetts is $20,000 per injured person. Uber provides no additional coverage in these cases.
The second event is where the driver has turned on his Uber app and is looking for fares (passengers). During this time, Uber’s coverage is triggered and the limits of coverage are $50,000 per injured person. If the driver has only the $20,000 minimum coverage on his personal policy, this event can lead to a significant increase in coverage for injuries.
The third event is where the driver’s app is turned on and he/she has been matched with a passenger. Practically speaking, during this time the Uber driver will be going to pick up his/her passenger. It is this event that triggers a huge increase in Uber’s insurance coverage. In this case, Uber’s coverage increases to $1,000,000 per injured person (there is also $1,000,000 in underinsurance coverage and $1,000,000 in uninsurance coverage).
In fourth and last event is where the Uber driver is actively driving his/her passenger. During this time, the insurance coverage available to an injured passenger or pedestrian is the same as in the third event - $1,000,000 per injured person, including $1,000,000 in underinsurance coverage and $1,000,000 in uninsurance coverage.
As you can probably see, there are significant insurance coverage differences depending on how an Uber driver is using his/her car. While the circumstances of a driver’s use of his/her car can be apparent if, for example, there is a backseat passenger in his car, it is less apparent in cases where the driver is operating his car for personal reasons, has his app on and is looking for a fare, or is on the way to pick up his fare. Because of this, it is very important (especially if you are a pedestrian or are not yourself in the Uber car) that you get the driver’s personal insurance information. The driver’s personal insurance company can be your friend in helping to determine the insurance coverage that is available and whether the driver’s personal policy or Uber policy will apply.
If you were involved in a car accident with an Uber or Lyft (look for the stickers on the car), I would be happy to discuss the other insurance coverage that might be available to you. Feel free to call me so I can start working for you!