Does Uber and Lyft Carry Commercial insurance?
Each time you want a ride, the chances are that you might opt for Uber, Lyft, or the traditional taxi. Uber and Lyft are the most popular rideshare services in the industry right now. That being the case, millions of people use the app each day to move around. So, how does the insurance industry cover such use of these taxi applications? That is what we want to look at in this guide. By the end, you will understand more about the type of insurance these cars have right now.
How Uber Classifies its Drivers
So, Uber and Lyft are both rideshare services that compete with taxis and other traditional transport services we might be used to. In such cases, these vehicles need to carry commercial insurance before they are allowed on the road. However, things are different when you look at the Uber business model.
When comparing the traditional transport vehicles to Uber, you will realize that Uber does not own these cars. The drivers are independent contractors. As a result, Uber does not become liable automatically whenever there is an accident. It is only if certain conditions are met, that a driver or passenger can sue Uber for damages.
Since Uber classifies the drivers as independent contractors, it can easily avoid paying for certain liabilities and damages caused by the drivers.
How Vehicle Insurance Works for Uber and Lyft Drivers
When Lyft and Uber started operations, they faced several challenges concerning the insurance cover for their drivers. These drivers did not have commercial policies making it harder for compensations to be authorized by the insurance companies. Considering that most drivers were using private insurances for commercial applications, it was so easy for the companies not to pay the settlement once they found out you were an Uber driver.
At the time, these drivers had to upgrade to a commercial cover. The cover was expensive for most drivers. Even with these issues, things got better with time. In most states, Uber was supposed to provide enough cover for their drivers and passengers while they were using their platform.
What happens if you get into an accident?
Accidents sometimes are inevitable, so the chances are that you might get into an accident as an Uber or Lyft driver are high. Whenever this happens, the other party will sue for compensation on the driver’s personal insurance cover. When the insurance adjuster finds out that the driver was using a personal cover for commercial purposes, then the claim will not be paid. Sometimes the cover might be revoked as the driver was violating its terms and conditions.
Whenever such happens, where do you turn to? It is going to be a disaster for everyone involved in the accident. The driver might even have to repair the car out of pocket.
It is why some insurance companies came up with the ridesharing endorsement cover for those who are Uber drivers. The Uber drivers can now get this important cover added to their existing policy at an additional fee. The policy will now cover the liability and property damage to the driver’s car at a much less price in comparison if the driver had to upgrade to a commercial cover.
Even with this additional cover, it was still not enough to protect the drivers and passengers. So, Uber and Lyft came up with their own covers. Even when Uber can cover the driver and passenger, it will be under certain conditions. You should read the fine print of these conditions to understand when you are covered. Also, these companies will only step in once you have exhausted your personal cover and any other options available to you.
Do Uber drivers carry commercial insurance? If you are unsure of what to do after an accident, talk to a personal injury lawyer for guidance. Such lawyers understand the laws better, especially those on ridesharing, so that they can help you get the best settlement after an accident.