Ride-hailing services like Uber and Lyft have recently become popular alternatives to traditional taxi cabs. If you use one of these services, then chances are you haven't thought about what could happen if you (if you work for a ride-hailing service) or your driver (if you simply use those services) gets into an accident. There are several different variables that could drastically affect your chances of recovering damages in the aftermath of an accident.
Passengers are Covered in Most Cases
While traditional taxi companies are legally mandated to carry commercial insurance policies that cover drivers and passengers, ride-hailing companies don't adhere to such strict standards. Instead, most drivers are required to rely on their own insurance coverage.
If you're a passenger, however, your ride-hailing service likely has you covered with a comprehensive policy offering $1 million or more in liability and bodily injury coverage. Here's how that coverage is likely to work if you're riding in a ride-share vehicle:
- If your vehicle is hit by another vehicle, the other driver not only becomes responsible for the accident, but the other driver's insurance is also on the hook for the damages and injuries. If the other driver is underinsured or isn't insured at all, the ride-hailing company's uninsured/underinsured coverage and personal injury protection (PIP) coverage kick in.
- If your vehicle hits another vehicle or a stationary object, your driver becomes responsible for any damages stemming from the accident. The company's liability policy and PIP coverage kicks in and covers the damages.
Also keep in mind that if the driver does anything that invalidates the ride-hailing company's insurance and those actions contribute to an accident, your injuries may not be covered.
Drivers May Be Covered Under Certain Circumstances
As mentioned before, drivers working for ride-hailing companies face unique challenges when it comes to insurance. Since the drivers are using their personal vehicles for commercial use, their personal vehicle insurance policy won't cover any damages as long as the driver in question is available for hire or transporting passengers. Most ride-hailing insurance policies only provide coverage when drivers are either in route to pick up fares or are carrying paying passengers.
This leaves the period when a driver is available for hire but doesn't have a fare. This state, commonly called "Period 1," leaves a gap in a driver's insurance coverage. Some ride-hailing companies offer Period 1 coverage with basic liability limits that mirror most personal auto insurance policies. For instance, a typical Period 1 policy may offer $50,000 in injury coverage per person, $100,000 in total injuries and $25,000 in property damage coverage.
Ideally, drivers should carry their own commercial auto insurance with at least $1 million in liability coverage. However, most drivers forgo this coverage due to the added cost when compared to personal auto insurance. Even more worrying, drivers often run the risk of losing their personal auto insurance policies when using their personal vehicles for ride-hailing use, leaving their vehicles uninsured at certain times.
What to Do If You're in an Accident
If you find yourself in an accident, it's a good idea to stay calm and gather insurance information from all parties involved. This information will likely be used throughout the claims process later on. You'll also want to notify the police and obtain a police report of the accident in question.
If you're injured, seek medical care as soon as possible. You'll also want to give your health care provider all of the details you've gathered at the scene of the accident in addition to your health insurance information. An experienced car accident attorney can help guide you through any other steps necessary to recover damages after an accident involving a ride-hailing service.