Services like Uber and Lyft are a great way to get from point A to point B if you don’t have your own vehicle readily available. It’s convenient too; unless you’re a driver and get into an accident.

These companies are known as rideshare services. Rideshare services are similar to taxis, except for a few key differences. The drivers operate their own cars as opposed to company owned-vehicles and are considered independent contractors instead of employees. These seemingly minute details allow the company to avoid accepting any liability in the event of one of its drivers getting into a car crash.

The majority of personal insurance policies do not cover damages suffered if the vehicle was being used for commercial purposes, and commercial policies tend to be expensive. That being said, if an Uber driver caused a collision in which the passenger or another driver was injured, what exactly would happen?

Being that most drivers have personal policies, anyone that has been harmed in the accident would file a claim to the driver’s personal liability policy in order to request coverage. The driver would likely make a claim under their collision policy to fix the damages done to their vehicle. However, it is bound to be discovered that the car was being used commercially, therefore, both claims would be denied by the adjuster, which leaves the injured party only one option—to sue the driver personally.

Luckily, there are better insurance options available for drivers, including ridesharing endorsements, additional protection, hybrid insurance packages, and personal insurance coverage extensions.

  • Insurance policies provided by ridesharing companies are generally quite restricting, which is why it is a good idea to have extra protection. Company-provided rideshare insurance usually only covers third party damages, unless you have a ridesharing endorsement as well. Ridesharing Endorsements cover liability and property damage, however, it is not available in every state and not during all periods.

Periods are used as markers for different stages of a driver’s job. Period zero means the app is closed. Period one means that the app has been opened and that the driver is driving around waiting for customers. The next period occurs while the driver is on their way to pick up a passenger, and then the following period happens when the passenger is in the vehicle, which ends when the customer is dropped off at their destination.

  • Additional protection is usually in the form of “gap coverage”, meaning it often covers things that are not already taken care of through your ridesharing company’s commercial insurance.
  • Hybrid insurance packages are used to replace your personal car insurance policy with a plan that is more beneficial to drivers of rideshare companies.

Personal insurance coverage extensions are usually meshed with the driver’s personal insurance policy through the same insurer and are used to extend personal coverage to more periods while on the job.

It’s always a good idea to invest in additional protection, especially as a driver for a rideshare company. For more information about your insurance, contact one of our lawyers for a free consultation.