Uber and Lyft are two of the most popular ride-share services out there that you could work for. However, if you are considering working with them, you need to know how the insurance is going to work. These companies require all of their drivers to have insurance, but will their insurance also cover you. Understanding the basics of how insurance will work in these situations is important when it comes to determining if this is the right job for you.
The Insurance Requirements
When you sign up as a driver with either of these companies, you will need to have personal car insurance. This is something that the company requires of all their drivers and it will need to meet or exceed your state minimums. This is particularly true when it comes to the liability coverage.
It is important to note that drivers will not need to have commercial insurance. While the companies do not require commercial insurance for you to drive for them, your personal insurance might not cover when you are working. This is due to the fact that most personal auto insurance policies will have a clause in them which disclaims coverage for accidents when the driver is driving for payment.
Before you sign up to drive with these companies, you should check your personal insurance. Every standard auto insurance policy will have a list of exclusions from coverage and driving for hire is often one of them. This causes a bit of grey area that you need to be aware of and you need to know what coverage is in effect in different driving situations.
Uber and Lyft do have insurance that will cover their drivers in an accident. However, the coverage will vary depending on the situation and you need to be aware of this.
When You Are Driving, But Not Logged Into Uber or Lyft
When you work for these companies, you will need to log into the app and place yourself in driver mode. This is when you are working for the company, but what happens with your insurance when you are not in this mode? In these situations, your personal car insurance coverage will apply.
If you are in an accident at this point, your personal auto insurance will cover you. The insurance coverage offered by Uber or Lyft will not play a role at all. The claims process in these situations will follow the usual rules.
When You Are Logged In, But Have Not Accepted A Ride
In these instances, your personal insurance may cover an accident as you have not taken any jobs so you are not driving for pay. However, there is a chance that they will not cover any damage to your vehicle in the case of an accident. The logic for this will be that you are technically working as you are logged into the app.
If you are in an accident that is your fault, Uber and Lyft company insurance will come into play. However, this coverage will only cover the losses sustained by the other people in the accident who have been injured or had property damage. The coverage will not help you with any damage to your car or cover any injuries you might have sustained.
The liability coverage offered by these companies will include $50,000 per person who was injured in the accident that was caused by their driver. There is a total injury liability of $100,000 per accident regardless of the extent of the injuries. Property damage liability will be capped at $25,000 and covers any vehicle or other property that was damaged. It is important to note that none of this will be applicable to the Uber or Lyft driver.
When You Have Accepted A Trip
If you have accepted a ride when an accident occurs, your personal insurance is not going to pay out. This is due to the fact that you are driving for pay and this is a common exclusion. However, Uber and Lyft provide liability coverage at these times.
The liability coverage will generally be capped at $1 million and will apply to any injuries sustained by the customer. The coverage also applied to the injuries and vehicle damage done to the other car during the accident when the Uber or Lyft driver is at fault. However, this coverage will not apply to the diver or the damage that their vehicle has sustained.
The $1 million liability cover will only be applicable while the trip is in progress. Once the trip has been completed, the liability coverage will end as well. It will only resume when you take another ride and you need to consider this.
Contingent Collision And Comprehensive Coverage
When driving for these companies, you need to be aware that they provide contingent collision and comprehensive coverage. This will only be applicable when the driver has their own comprehensive or collision coverage. This coverage will pay for damage done to the car of the Uber or Lyft driver.
The cap on the payment from this coverage will be the cash value of the car. It is also subject to deductibles which vary between the companies. The deductible with Uber is $1,000 while the deductible with Lyft is $2,500.
Getting Commercial Insurance
While you do not have to get commercial taxi insurance, you might want to seriously consider this. This is due to the fact that the company insurance offered by Uber and Lyft will generally not cover your vehicle or injuries in the case of an accident. Getting your own insurance will ensure that you are not paying out of pocket for the damage to your vehicle and your own injuries.
If you do get commercial insurance or have personal auto insurance that covers you when working, the company insurance will be considered supplementary. Your insurance will have to pay first and then the company insurance will cover the left over if your insurance has not covered the entire costs of the accident. The amount that the company insurance pays will vary depending on your insurance limits.