Insurance Offered by Uber and Lyft Leaves Grey Areas for Drivers

Rideshare insurance is something that we can’t decide who and when we are covered. If you use your vehicle for rideshare driving the chance of receiving the insurance payment if an accident occurs depends on many factors like which insurance company you have insured your car and for what rideshare company you work for. Mostly, Uber and Lyft provide you insurance for your vehicle when on a trip, but the payments still depend on some other criteria.

Period 1 Period 2 Period 3
The thing is that Uber and Lyft pay for the rideshare driver for an accident that happens only in the periods of 2 and 3. 2 is the period when you start your trip to pick up a customer, and the period 3 is when you pick your customer and drive to the destination. So the rideshare driver will not receive any coverage within the first period, when you are just driving around, and this is where you have to face some risk.

Personal Insurance
Uber and Lyft want their rideshare drivers to have their personal insurance. And the other main problem is that the insurance companies will not pay you if they found out that you drive for Uber or Lyft and you’re not engaging in personal driving. Uber and Lyft present primary liability and surplus collision when you’re engaging in a trip or picking up a customer. So this assures that you are fully insured as a rideshare driver. But if you as a rideshare driver gets into an accident, you will have to compensate a $1000 or sometimes maybe $2500 deductible to obtain the collision coverage from Uber and Lyft respectively.

The next risk is that if you face an accident as a rideshare driver, you have two options to claim your insurance and one way is through personal insurance, and the other is through Uber or Lyft’s insurance company, James River. Some people can get the claim through their personal insurance without any issue and there are also rideshare drivers who are being dropped by the insurance company. The main reason for this dissimilarity is that if you get caught by the insurance company that you are a rideshare driver and most probably drop you if you tell you are one.

Recommending you to lie to your insurance company is wrong because it is a crime. Claiming to your Uber or Lyft’s insurance company to avoid your insurance company from getting to know that you got an accident when rideshare driving, it is a perfect situation for the liability part falling on you. But because both the companies offer accident coverage in excess, firstly you should make an initial claim with your private insurer. Eventually, your personal insurance will deny, and that’s where Uber and Lyft will come affront to help you.

Some drivers had successfully got covered by their private insurers, and some stated that they were never asked if they were rideshare drivers and some said that they never revealed the true identity to the adjuster. Also, some drivers received their deductible by Uber. They furthermore added that the process was a bit painful and slow but the Uber did not ask them to file a claim with their private insurance company first. Normally it is Uber’s way that you should first file a claim with your personal insurer to get the excess coverage. So this is good news for the rideshare drivers of Uber because they can get into an accident and file a claim with Uber without their personal insurer knowing about it.

That was the story for the rideshare drivers of Uber and let’s see what the situation is in Lyft. Most of the rideshare drivers from Lyft who faced accidents stated that Lyft forced them to get the coverage through their private insurance company before even being permitted to pay the 2,500 bucks of deductible and get coverage from the side of them. But there was this one case where the driver wasn’t dropped. So these incidents are some perfect examples which explain how confusing this whole ridesharing insurance situation is. In some regions there are not even a single personal motor insurance company to cover rideshare drivers. So this is one of the significant problems that hundreds of rideshare drivers face every day.

But still, there are some solutions to this problem provided by different parties where some are acceptable and some are not. An answer from the insurance companies and regulators are that is that the rideshare drivers should buy commercial insurance. But most of the drivers don’t like this because they don’t want to pay for expensive ($300-$500 per month) commercial insurance for something that they might not use every week or month.

There are some companies similar to Erie insurance which provides hybrid inventions for rideshare drivers in the state of Indiana and Illinois and they are the only insurance providers that support the rideshare drivers so far. A hybrid policy which covers private and part-time commercial driving is what rideshare drivers need. And it seems that the insurance companies or Uber and Lyft don’t care about this problem at all. But luckily, within these few years, most of the major carriers have started providing insurance policies for rideshare drivers. So this is great news for the rideshare drivers so that they no longer need to be dropped by the insurance companies. But the sad part is that only a very few companies have provided that service so far.

Just spend some time searching for insurance companies that can offer insurance to rideshare drivers because it is tough to file a claim if they have to face an accident and will also have to lie for the insurance company to get the coverage. With the Uber’s and Lyft’s silence on this matter it is only hope that insurance companies will see this as an opportunity to help out some rideshare drivers to make some extra money. And also it will be good if companies like Erie who have taken steps to help the rideshare drivers by expanding their businesses to other states. It will be good news for the rideshare drivers out there.