I Was Hit By an Uber® or Lyft® Driver—What Now?

Key liability and insurance issues if you're in an accident with a rideshare driver.

What happens if you get into a car accident with an Uber® or Lyft® driver? Whose car insurance will apply to your claim? Read on to learn more.

Uber®, Lyft®, and the "Rideshare" Business Model

Uber® and Lyft® compete with (and typically come out on top of) taxis and other car services in most major cities in the U.S., and Uber®'s imprint is worldwide. Uber® and Lyft® are similar to many taxi services in that they do not own, operate, or control the cars, and they do not hire the drivers. Rather, the drivers contract with these companies to pick up passengers. The major differences between Uber® and Lyft®, on the one hand, and taxis and traditional car services, on the other hand, is their pricing structure and the manner in which customers "hire" an Uber® or Lyft® driver.

Unlike taxis, customers cannot hail an Uber® or Lyft® driver on the street. Rather, customers download the Uber® or Lyft® app to their smartphone and arrange for a driver by interfacing with the app. Pricing for a ride can vary. Some rides can be cheaper than a standard taxi, and other rides can be more expensive. One unusual (and often controversial) aspect of rideshare pricing is "surge" pricing, which boosts fare rates when the demand for rides increases.

Who Pays If You are Hit by an Uber® or Lyft® Driver?

As in any car accident case, the person bringing the claim must be able to prove two things in order to get compensation: liability (who was at fault for the accident) and damages (how badly the claimant was injured). If you were hit by an Uber® or Lyft® driver (or injured as a rideshare passenger), you must be able to prove that someone was negligent in order to have a claim.

If the negligent party was an Uber® or Lyft® driver, the most straightforward course of action would be against that person, who would refer the claim to the driver's personal insurance carrier—just like most other car accident claims. But alas, because the driver was driving for money, the situation gets very complicated. Unless the driver has a commercial policy, or has purchased a ride-sharing "endorsement" (available in a few states), the driver's personal policy will not cover the accident. That's because the driver's insurance contract specifies that the driver will use the vehicle only for personal use—and ride sharing isn't personal use. The carrier will deny the claim.

Fortunately for the injured person, Uber® and Lyft® responded to this problematic scenario by offering liability insurance to their drivers, which will kick in when the driver's carrier denies the claim (drivers must submit the claim first to their own insurance carriers). So, legal responsibility aside, it's entirely possible to hold Uber® or Lyft® financially responsible when you're a non-negligent person in an accident caused by an Uber® or Lyft® driver.

Uber®/Lyft® Drivers and Car Insurance

Both Uber® and Lyft® provide liability coverage for their drivers, and the companies have adopted very similar policies, with coverage that varies depending on when the accident occurs:

  • Period 0: When the driver is not logged into the Uber®/Lyft® app, Uber®/Lyft® provides no coverage
  • Period 1: When the driver is logged into the app but has not yet accepted a ride request, Uber®/Lyft® provide liability coverage for any accident that is the fault of the driver, up to $50,000 per person injured in an accident, and $100,000 total injury liability per accident, and $25,000 property damage liability.
  • Period 2: When the driver has accepted a trip and is on the way to pick-up, liability coverage increases to $1 million.
  • Period 3: When the rider is in the car, ending at drop-off. Liability coverage of up to $1 million, plus limited coverage for damage to the driver's car, and uninsured motorists' coverage.

What to Do After an Uber®/Lyft® Accident

The first thing you should do after a car accident is get the names, contact information, and insurance details of everyone involved, and ask any witnesses for their contact information, too. Next, take as many pictures of the accident scene, the vehicles, and anything else relevant to the accident—from as many angles as you can—before you leave the scene.

You should also call the police from the accident scene. Many states have a law requiring that law enforcement be alerted to any car accident that causes bodily injury or more than minor property damage, but, in any accident involving an Uber®/Lyft® driver, you will generally want the accident officially investigated as soon as possible, so that you'll have a police report that you will need to back up your claim.

Can I Sue Uber or Lyft?

Uber® and Lyft®—and the rideshare-by-app marketplace—are well-established, but legal issues related to these services are still being worked out in the courts.

If the ride sharing driver was responsible for the accident, you can try to argue that the ride sharing company shares some level of blame for the crash, but this is a murky strategy. Uber® and Lyft® have worked extremely hard to maintain that Uber® and Lyft® drivers are independent contractors, not employees, but it's unclear whether or not these companies can continue to shield themselves behind this argument, especially in the face of legislative efforts to have drivers classified as employees. In California, for example, a law known as "AB5" is meant to protect Uber® and Lyft® drivers (and other so-called "gig workers") and make it more difficult for companies to argue that rideshare drivers and deliverypersons are not employees. (More: Are Uber® drivers employees or independent contractors in California?)

In any case, keep in mind that because recovery against Uber® or Lyft® insurance coverage is probably an option for you—whether through the company's $1 million liability coverage, or through its $1 million UIM coverage—if you're injured in an accident where the ride-share driver was at fault, going after the company directly is probably a last (and hopefully unnecessary) resort.

If you're involved in a traffic accident with an Uber® or Lyft® driver, especially if your losses are significant, you might want to discuss your situation with a car accident lawyer.

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