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Uber & Lyft: Insurance Coverage Issues in Ride-Sharing Apps

Posted on behalf of Arnold Law Firm in
auto accident laywer Uber and Lyft, the worlds foremost ride-sharing applications, have been facing widespread litigation since they first launched. The most recent legal conflict facing the two California-based technology companies and competitors concerns the issue of insurance coverage. At issue is whose insurance policy applies when an Uber or Lyft driver is involved in an accident. The problem arises because there are times when a drivers personal insurance policy does not apply and when the ride-sharing companies insurance policies also do not apply. For example, when a driver who is carrying a passenger is involved in an accident, both the insurance policies of the ride-share app, be it Uber or Lyft, will apply. Additionally, if the driver is not carrying a passenger and is not working for Uber or Lyft at the moment of the accident, then the drivers personal insurance policy will apply. However, if the driver is on the way to pick up a customer or is driving around waiting for a customer when the accident occurs, then neither Uber and Lyft nor the personal insurance policies will apply. This creates a problem called gap-coverage, which is used to describe those accidents where no ones insurance policy will apply.

Gap Coverage Laws

California legislators have devoted substantial time and effort to creating legislation that resolves gap-coverage issues. The California Department of Insurance, state insurance companies and legislators have cobbled together a new law that will go into effect July 1, 2015. The law, AB2293, will address Period 1, which is used to identify that period in time when an Uber or Lyft driver is working but is not carrying a passenger. The law calls for personal insurance policies to offer coverage policies that eliminate the gap in coverage. Minimum coverage rates include:
  • $50,000 minimum for single personal injury
  • $100,000 minimum for multiple person injuries
  • $30,000 minimum for property damage

Keeping Everyone Safe

Regardless of how the ridesharing programs and applications are insured, the most important thing is that new policies and laws protect the rights of drivers and passengers. Uber and Lyft, insurance companies and legislators have banded together to craft legislation that ensures the safety of California residents. Nonetheless, Arnold Law Firm attorneys will remain vigilant to ensure that car accident victims can still get the financial compensation they deserve after an accident.

If you or a loved one has been involved in an Uber or Lyft accident, contact a Sacramento personal injury lawyer at Arnold Law Firm today by calling  (916) 777-7777 or use the Free Case Evaluation. We offer all potential clients a free consultation.

Settlement - $3,767,000

Truck Accident

A 20-year-old man who had been married for just 12 days left home on his way to work. He was driving on Pleasant Grove Road in Sutter County in the early morning when he came upon a slow-moving truck. As he pulled out to pass the truck, the truck driver turned left in front of him. The young man attempted to steer back into his lane but his vehicle struck an un-flagged piece of metal extending from the back of the truck. He died in the resulting crash.

Expert witnesses brought in by the Arnold Law Firm proved that the truck, owned and operated by a hauling firm, should never have been on the highway that morning. Specifically, the rear and side turn signals did not work and the rear-view mirror was in a poor state of adjustment at the time of the collision. As a result, the driver, who had failed to properly inspect the vehicle before setting out that morning, couldn’t see the young man’s vehicle as it attempted to pass.

The poor condition of the truck, its lack of maintenance and the manner in which it was operated were found to be substantial factors in causing the collision that killed the young man. The testimony also established that the man had been making a lawful pass at the lawful speed limit and acted reasonably when he attempted to avoid the collision.

The man’s 20-year-old widow was awarded $3,767,000.77, his parents were awarded $185,131 and the family was reimbursed $11,899 in funeral expenses. Though money is a poor substitute for a young man’s life, this verdict demonstrates that drivers who endanger the lives of others will be held accountable for their actions.