Most of us don’t think twice about pulling out our smartphones and calling a rideshare vehicle, such as an Uber or Lyft. For many, they are a convenient and relatively inexpensive means of getting from one place to another.
It’s important to remember that car accidents can happen anywhere, including in a rideshare vehicle. Unlike most car accidents, where the two drivers’ insurance companies determine fault and cover losses, many other parties could potentially be held liable in the event of an Uber or Lyft accident.
Drivers as Independent Contractors
Many of us associate rideshare vehicles with taxi cab companies. These types of companies essentially have a fleet of vehicles that their employees use to pick up customers. On the other hand, rideshare companies operate a bit differently.
Uber and Lyft don’t necessarily employ those who drive for the companies. Instead, drivers act as independent contractors, utilizing their own vehicles as transportation for those who are using the apps.
Ridesharing companies purposefully so this so that, in the event of an auto accident involving one of their drivers, the companies are not automatically liable for damages. In addition, these companies actually require their drivers to have their own auto insurance that will kick in first if a crash occurs.
Three-Part Insurance Plan
Essentially, liability coverage is dependent on what the Uber or Lyft driver was doing at the time of the accident. Below are three scenarios that can help determine coverage:
- Not Driving for Uber or Lyft at the Time of the Accident. The rideshare driver was not available to pick up passengers and had the driver mode turned off. If a car accident occurs during this time, the driver would need to go through their own insurance. If someone else is injured by the driver, they will have to make a claim against the driver’s personal auto insurance, too.
- The Driver Was Logged Into the App but Had No Passenger. This means that a driver was waiting for a ride request with driver mode turned on when the accident occurred. In this situation, both Uber and Lyft have contingent liability coverage that will kick in if the driver’s coverage doesn’t cover all damages: $50,000 per person bodily injury, up to $100,000 per incident, and $25,000 for property damage.
- The Driver Was Transporting a Passenger. If an accident occurs while the driver was transporting a passenger, Uber and Lyft will generally accept financial liability and cover the damages. Both Uber and Lyft have $1 million policy coverages and $1 million in dollars in uninsured and underinsured insurance coverage.
Uber and Lyft’s $1 Million Liability Coverage
There are certain cases where the driver’s own auto insurance may not be enough to cover all the damages, such as if multiple vehicles are involved or totaled. This can leave some injured individuals with out-of-pocket expenses that they cannot afford.
To give customers some peace of mind, both Uber and Lyft offer an additional $1 million liability policy coverage. This will go into effect after the driver’s insurance coverage is run up or their insurance company denies a claim.
Contact The Chopin Law Firm
If you’re injured in a rideshare accident, you should not hesitate to pursue compensation for your losses. Handling the negotiations during this process can be challenging and stressful, especially when insurance policies are unclear.
Our team of skilled car accident attorneys at The Chopin Law Firm are here to take the stress off of your back during these times. We will work as your legal advocates to determine liability in your rideshare accident case and work hard to ensure you receive maximum compensation for your losses.
You can feel confident knowing your case is in our hands. Contact The Chopin Law Firm at (504) 475-2429 to schedule your free case review. We are also providing phone consultations during the coronavirus pandemic.