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What insurance protection do you have in an Uber or Lyft vehicle?

Posted on September 18, 2019 in

Using Uber or Lyft to get around can be a much more affordable option than maintaining your own vehicle. A ride-hailing service helps you avoid all of the costs associated with your own vehicle, from the purchase price and insurance to maintenance and gas. However, the fact that you don’t have your own could prove to be a potential issue if you wind up in a crash while in a Lyft or Uber vehicle, as you have no control over the driver’s actions or maintenance of the vehicle.

Many riders assume that the company providing the connections between the driver and the passenger will provide the insurance coverage as well. Sadly, that is often not the case. In fact, company policy at Uber requires that the driver files a claim with their personal insurance policy first. That could leave you in a vulnerable position where your property damage or medical costs don’t receive quick resolution and coverage.

The greater your overall costs, the greater the likelihood that insurance companies will want to play a game of hot potato with your claim after a ride-hailing service arranges a trip that results in a collision.

The driver’s policy may not offer business protection

Many people who drive for Uber or Lyft don’t seem to understand that personal insurance policies don’t inherently cover business-related accidents. The policy is meant to protect the driver, their passengers and anyone in the other vehicle. To protect themselves as a driver and their paying riders, they need a commercial policy, which many aren’t willing to pay for.

When a driver is on the road for eight or 12 hours a day carrying people through heavy traffic in high-stress situations, that may increase the risk of a crash and leave their insurance company unhappy about a claim or simply unwilling to pay out.

In that situation, both Uber and Lyft have corporate insurance policies which may protect the passenger from incurred medical and property damage costs. However, there could be a long time between the date of the crash and when the corporate insurance policy finally becomes involved.

Your individual insurance policy likely won’t cover anything

You may have a robust health care policy, but if you get hurt in someone else’s vehicle, your insurance company isn’t likely to want to pay out on that claim. They will expect that the person driving will have coverage that protects their passengers in the vehicle.

People who get hurt or who suffer major property damage while riding in an Uber or Lyft vehicle may find themselves hit with major bills that they have no way to cover. They may have to deal with a protracted insurance claim process that requires that they give statements, file paperwork and spend a lot of time waiting.

Navigating the insurance system isn’t easy in the simplest of situations, but when you involve a third-party company and a driver who is technically a contractor, not an employee, the situation becomes even more difficult.