Whose Insurance Covers Accidents With Uber, Lyft Drivers?

Real-time ridesharing companies like Uber and Lyft found a marketplace for themselves in Chattanooga ever since riders are using these services as alternative methods of transportation.  Compared to the traditional taxi services, there are a few minor differences in how Uber and Lyft operate and handle requests from riders.

The steps for using Uber and Lyft services are fairly easy and are as follows:

  • A rider uses an application on their smartphone to request a ride from Uber or Lyft.
  • The nearest driver will receive the request and drive to the address where the rider is waiting to be picked up.
  • The Uber or Lyft driver transports the rider to their destination.

All billing is handled through the company’s app and the average charge is about 20 to 30 percent less than taxi services.  While this may seem like an ideal way for riders to save both time and money, there are some potential problems with these rideshare operations in the event that the driver is involved in an accident.

Both Uber and Lyft have liability insurance coverage for their drivers, but this insurance is not always reliable when accidents occur. For rideshare drivers and their passengers to be covered under the company’s liability policy the driver must be:

  • Be “signed in” to the company’s web application and available to accept ride requests.
  • Have accepted a ride request and be en route to the location where the passenger is waiting for pickup.
  • Be en route from the pickup location to the passenger’s destination.

At any other time, the company’s liability insurance will not be enforced and the driver’s personal auto insurance will be held responsible for covering any damages that are the result of the car accident. While this may sound straightforward, this is a problem that both the rideshare driver and his or her passenger should keep in mind.

All personal auto insurance policies are not responsible for any damages that occur if the vehicle is being used for “commercial purposes,” such as a rideshare service.  If an accident occurs and the driver was working as a rideshare driver, the policy will refuse to cover any damage claims.  Thus, the driver will be personally liable in the event of an accident.

Due to this potential lack of coverage, anyone involved in an accident with a rideshare driver should contact a car accident lawyer as soon as possible after an accident to discuss their options to recover damages.