Innovation often creates new scenarios that complicate the old way of doing things. The rapid growth in popularity of ride-sharing services like Uber and Lyft provides an excellent example. The insurance policies that most people carry leave Uber drivers and passengers without coverage. This is a big deal.
What if you want to be an Uber or Lyft driver?
The research I’ve done so far is that your personal policy does not cover you. Not all. It all has to do with ‘driving for hire’ just as though you were driving a traditional taxi or limousine. If you were in an accident and your personal policy carrier learns that the accident happened while driving for hire which will void your coverage – coverage for property damage and coverage for personal injury. If your passengers are injured in an accident and you get sued, you won’t have any defense coverage either.
What if you are a passenger?
As mentioned above, passengers don’t have the coverage they typically have while riding as a private passenger – the typical scenario of getting a ride somewhere in a friend’s or business colleague’s car. Your own policy also has PIP – personal injury policy – coverage which won’t be available to you. Because the driver isn’t covered for the situation (‘driving for hire’), PIP coverage won’t be available from that car owner’s policy either. PIP typically covers $20,000 in work loss and $20,000 in medical expenses
Lack of coverage as a passenger means that your only recourse may come from filing a lawsuit. Assuming you win the suit, the person you’re suing may or may not have the ability to satisfy the judgment.
What should I do?
Driver beware. While we like and appreciate the innovation and convenience that comes from these services, you have to be aware of the risks and pitfalls you face when doing so.
Insurance is often complicated and new situations like this can make if feel even more complicated. We’re here to help you understand the details and options so please give us a call so we can do what we do best – help you make the decisions that are right for you.
