What You Need to Know about Uber’s $1 Million Insurance Plan

Rideshare Apps

Uber, Lyft and similar apps are usually considered technology companies and are often not subject to the same rules as taxi companies or similar transportation services. The service that they provide is connecting people with individuals who want a ride with people who are willing to drive them around. Using an app of this nature is often quick and convenient. It is often cheaper than using a taxi.

Safe Ride Fee

Part of the purchase of an Uber ride is usually the cost of a safe ride fee. This fee pays for background checks on Uber drivers, motor vehicle screenings and driver safety education. However, Uber cannot guarantee that a passenger will not be injured in a car accident since being in traffic carries the risk of being hurt in an accident.

Employee Status

Uber drivers are not considered employees of the company. This is problematic for individuals who are injured in an Uber vehicle because employers are generally vicariously liable for the actions of their employees. Uber drivers are instead considered independent contractors. This distinction has allowed the company to deny liability when their drivers are involved in accidents. In contrast to the treatment involving employees, companies are generally not liable for the actions of independent contractors.

Insurance Coverage: Basic Principles

Uber has a $1 million insurance policy. However, the company and passengers are covered by a three-part insurance plan. The coverage that applies is based on the driver’s activity at the time that the accident occurred.

Not Available

If the driver is using his or her vehicle for personal business and is not available to accept requests from rides from customers, the Uber policy does not apply. Instead, the driver’s personal policy covers him or her. The coverage limit is based on this personal policy. This principle applies equally to the driver of the Uber vehicle. The policy that may provide coverage is his or her own, depending on the type of insurance that he or she has.

Available but No Passenger

If the driver is available on the app and ready to pick up passengers but is not carrying a passenger when the accident occurs, the primary insurance is the driver’s own insurance policy. However, Uber provides additional coverage in this situation with liability coverage up to $50,000 per injury with a maximum of $100,000 and a maximum of $25,000 in property damage. This coverage only kicks in if the driver requests it and if the driver’s personal liability coverage does not cover all of the damages.

Available and Carrying a Passenger

This is the situation in which the $1 million policy can kick in. If the Uber driver is carrying an Uber passenger, the driver and passenger are covered under the liability insurance policy. Additionally, if a third party was injured, such as a cyclist or pedestrian, the third party is covered by Uber’s policy when the driver was carrying a passenger. However, if Uber denies coverage, the Uber driver and passenger may still be denied by the driver’s personal insurance policy because the driver was driving for pay at the time of the accident.

Uninsured Motorist

Uber also carries a $1 million uninsured/underinsured motorist policy so that if the accident is caused by an uninsured driver, this policy will kick in.

Denied Claims

Uber’s insurance policy’s carrier is dedicated to helping avoid paying out as many claims as possible. It is not uncommon for accident claims to be denied by Uber’s carrier. Another element that makes the situation more complicated is that Uber does not consider drivers employees. This makes it even more difficult for passengers to get covered if the driver was distracted, drunk or driving recklessly. Accident victims may respond to a denial of this nature by suing Uber directly. Alternatively, they can seek payment from the driver’s personal insurance company. However, many insurance policies prohibit their insured from driving for work purposes or using their vehicle as a taxi or rideshare vehicle. Suing the driver directly may limit the amount of damages that can be received.

Legal Assistance

If an individual is injured while riding as a passenger or driver for Uber, he or she may be able to pursue a civil lawsuit against Uber or the driver’s insurance company. He or she may be entitled to compensation for medical expenses, lost wages, pain and suffering and other damages.

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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer.