Ridesharing services such as Uber and Lyft are a fact of life in many areas. Given the rideshare company's recent arrival on the scene and its unconventional business model, many questions arise from crashes involving a rideshare driver. What happens if a rideshare driver hits you? Who is a fault, the ridesharing company or the driver? What if you were a passenger and your driver caused the collision; who will compensate you for your injuries? What if another vehicle hits the rideshare service you are using?
To explore these scenarios, let's look at how these companies insure their drivers.
Rideshare Insurance Is More Complicated than Regular Insurance
Before ridesharing companies, drivers on the road were generally either commercial or personal. If you needed a ride, you could pay a commercial driver (think taxi), or you could ask friends or family to drive you. Commercial drivers typically have work vehicles and their company provides commercial car insurance. If you are getting a ride from a friend, their insurance covers the trip. However, personal car insurance policies do not cover drivers who are transporting passengers for a fee. This means that rideshare services are a new in-the-middle category.
Neither Uber's nor Lyft's drivers are employees. Instead, their drivers are independent contractors. So unlike a taxi cab driver, rideshare drivers do not have a company-provided vehicle and they do not have traditional commercial insurance policies. Platforms still want to reduce their liability, so they have policies that can cover their contractors under specific circumstances. A rideshare driver's level of insurance will shift depending on their status as a driver at the time of the accident.
Let's look at Uber's and Lyft's systems specifically:
1. Driver Is “Offline”
If a rideshare driver is “offline,” it means they are not working, so the crash is just like any other crash. It does not matter if that person does work for Uber or Lyft if they weren't working at the time of the collision.
In this instance, the driver's regular car insurance policy will likely apply to the incident. Most Texas drivers carry the minimum allowable coverage which is: $30,000 in liability coverage for each injured person, up to a total of $60,000 per accident, and $25,000 for property damage per accident.
2. Driver Is Waiting To Give A Ride
Uber and Lyft consider a driver as working if the rideshare driver is available and is waiting for a ride request. The rideshare insurance required by the companies provides a basic level of coverage.
- $50,000 in bodily injury per person
- $100,000 in bodily injury per accident
- $25,000 in property damage per accident
- $50,000/person for bodily injury
- $100,000/accident for bodily injury
- $25,000/accident for property damage
"Except covered accidents occurring in Arizona and Nebraska; where the third-party liability insurance is $25,000/per person for bodily injury; $50,000/accident for bodily injury and $20,000/accident for property damage; consistent with state requirements."
3. Driver Accepted A Ride Request Or Is Transporting A Rider
Both Uber and Lyft require drivers to carry a $1,000,000 third-party liability policy to cover accidents that happen after a driver accepts a ride. The word "accepts" is key. This million-dollar policy covers any driver that is on the way to pick up a ride or is actively driving a customer. For practical purposes, this is no different than a commercial vehicle insurance policy. We'll discuss why this changes so much about the accident, shortly.
What Do You Do After a Crash Occurs?
I turned to the award-winning commercial accident attorney, Michael Grossman, to learn what to do if a crash involves a rideshare driver. He immediately pointed out that no matter the status of the rideshare driver at the time of the collision, there are several things you should always do if in a car accident.
First, call the police to the scene of the crash. Then, collect as many details about the crash as possible. You will need every driver's name, contact information, and contact information for their auto insurance policy. If any witnesses pull over to assist with the crash, it is helpful to get their names and contact info, too.
Next, you will want to take several photos of the accident scene, the vehicles, the vehicle license plates, and your injuries (if any). Finally, Michael Grossman stressed the importance of obtaining treatment as quickly as possible for injuries. Too many times our attorneys have heard the story of victims feeling fine after a crash, only to learn they had an undiagnosed injury that created serious problems later on.
Commercial Vehicle Accidents Are Not Like Regular Car Accidents
After establishing what should happen after every crash, Michael Grossman then addressed commercial vehicle accidents. Most people think car accidents and commercial vehicle accidents are the same, but they're not. If someone is injured by a rideshare driver, Michael Grossman has two questions they need to consider: How severe are my injuries? and Which insurance policy applies to my situation?
If you suffer only minor injuries or property damage, then in all likelihood that's something an accident victim can work out with the insurance company without involving a lawyer. If the injuries are severe, then it's likely that a lawyer can help, regardless of which insurance policy applies.
But why would you need a lawyer to help? Because insurance companies will not have your best interest in mind. Insurance companies are not required to pay accident victims, and insurance companies will deny legitimate claims. The third-party insurance provided by a rideshare company is no different. There is a risk the insurance company will try to take advantage of the confusion after the crash while the victim tries to determine "who is responsible for what" so they can avoid giving a victim just compensation.
There are two major traps that victims can avoid.
Don't Sign Legal Documents Without Legal Counsel
First, commercial vehicle accidents do not work by simply filing a claim with an adjuster, they're serious legal matters. When an insurance company has $1 million on the line and faces the prospect of paying out that much money, they're going to fight, and too often they are not above lying to victims. Unfortunately, too many victims don't realize the situation they're in until it's too late.
This isn't just attorney speculation. In March 2012, a gentleman was hit by a commercial semi-truck that had jack-knifed. At the scene of the crash, the commercial truck company driver tried to have the victim sign a document that would release the company from all liability for the collision. Outrageous, right? Sadly, it gets worse. While the victim was in the hospital, only a few days after the crash, the commercial truck company sent an insurance investigator to offer the victim coverage for his medical bills right away. The investigator intentionally lied and mislead the victim into believing any additional damages could be addressed at a later date. However, what the victim actually ended up signing was a release of his right to pursue any claims.
True, the victim had an initial medical bill close to $10,000 that the trucking company covered, but the waiver prevented the victim from getting compensation for his wages while he was out of work, his future related medical bills, his damaged vehicle, etc. Additionally, instead of filing one lawsuit for his damages (which is already a large task), the victim then had two lawsuits. He had to sue the company for the waiver they fraudulently forced him to sign before he could get any compensation for the crash. This process meant the victim had no compensation until 5 years after the crash.
Don't Let the Insurance Company Short-Change You
There is a second trap that victims need to be aware of. Even though the law requires drivers to disclose that they have an insurance policy, so that victims can pursue a claim, the law doesn't require drivers to disclose whether or not it's an insurance policy.
Commercial accident attorney, Michael Grossman explained that he has seen numerous instances where an adjuster for an insurance company behaves as if the lower non-commercial limits apply in situations where it's clearly a commercial accident. The insurance adjuster convinces victims that $30,000 or $50,000 dollars are all they are entitled to when the truth is that there is money available to cover the victim's entire losses.
In a personal injury claim, victims are entitled to seek compensation for:
- Medical expenses,
- loss of earning capacity,
- physical impairment,
- physical pain,
- mental anguish,
- and if the injury was fatal, there are additional wrongful death and survival damages available.
Any car crash has the risk of resulting in serious injury or death. If a victim's injury is life-altering, the damages easily exceed $100,000, and if a victim loses a family member the damages are far greater than $1 million. An experienced attorney will see through an insurance adjuster's games and work to ensure their client gets justice.
At the end of the day, many people find the convenience of rideshare platforms indispensable, however, few recognize the complications that can ensue when a rideshare driver causes a crash. These aren't typical crashes and often require the kind of assistance that the attorneys at Grossman Law Offices are happy to provide.