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Published on May 11, 2016 by Edgar Snyder

What If My Uber or Lyft Is in a Car Accident?

uber car

Written by guest-blogger Attorney Lawrence "Guido" Gurrera. Learn more about Attorney Gurrera.

These days, you may see fewer yellow taxis on the road and more cars with a pink mustache on the hood or a black and white "U" sticker in the window. These are the identifying symbols of Lyft and Uber, the two largest "ridesharing" companies out there.

People use these services for a variety of reasons – because they don't have a car, because they don't want to drink and drive, or because it's simply more convenient. No matter why you're taking advantage of ridesharing, you assume you will be safe during your ride. But what happens if your Uber or Lyft is involved in an accident and you're injured? Who is financially responsible? Keep reading to find out.

What is "Ridesharing?"

If you are unfamiliar with the concept of ridesharing, it is a way to help connect people who need a ride with people who have a car and are willing to provide the lift. In other words, it helps people to "share" a ride – for a fee, of course. Connections between the drivers and the passengers are made through a cell phone application. The app pinpoints where the passenger is and connects him/her with the nearest driver. No physical money exchanges hands as the fare for the ride is calculated through the smartphone app, and funds are transferred automatically from the passenger's bank account at the completion of the ride.

In January 2015, Uber released a report about the scope of its operation in the United States. The report noted that at the end of 2014, there were more than 160,000 active Uber drivers in the United States. Uber is generally available only in larger cities. In Pennsylvania, you can find an Uber in Erie, Pittsburgh, Harrisburg, Wilkes-Barre/Scranton, Lehigh Valley, Lancaster, Reading, and Philadelphia.

How Do I Know My Driver is Safe?

After a ride, the passenger is given the option to rate the quality of the driver on a 1 to 5 star scale. The driver's average rating is then displayed to other potential passengers so they know in advance the quality of the ride they can expect (and decline the trip if they want). But other than the driver's first name, the type of vehicle, and the average star rating, there is nothing that conveys how safe a driver actually is.

Recently, it was reported that Uber agreed to pay $28.5 million as part of a class action settlement over claims that it misled riders about the safety of its service. Lyft has been accused of similar misrepresentations. With all of these ridesharing drivers on the roads and questions swirling about their safety, you may be wondering: what happens when you are involved in an accident with an Uber or Lyft driver? Where do you look for compensation? How much is available?

Well, the short answer to these questions is… it depends.

Car Insurance and Ridesharing

Ridesharing drivers should have two insurance policies. First, every vehicle registered in Pennsylvania is required to have automobile insurance. Since these Uber and Lyft drivers are driving their own personal cars, they are required by law to have insurance. However, personal auto insurance policies are for personal use, not commercial use. So once the driver carries people or property for a fee, their personal insurance will typically employ a clause excluding insurance coverage for that period of time.

If the Uber driver is not working and causes an accident, then his personal insurance should apply. In Pennsylvania, the state required amount of liability insurance is only $15,000, although the driver could have more coverage. If the driver is working at the time he causes the accident, his personal insurance will most likely refuse to provide him with any insurance.

This is where the second insurance policy comes into play. Uber and Lyft carry commercial insurance policies to cover their drivers while they are working. Both companies have disclosed that the insurance policy they provide to their drivers has $1 million in liability coverage. So, if your driver is at fault for an accident and you're injured, that coverage would apply.

Additionally, these insurance policies contain $1 million in Uninsured Motorist and Underinsured Motorist benefits. These coverages are extra protection for you as an Uber or Lyft passenger. If you're a passenger in one of these vehicles and another driver causes an accident, but that other vehicle has no insurance whatsoever (uninsured) or does not have enough insurance to fully compensate you for your injuries (underinsured), the policy will provide up to $1 million in available benefits.

It should be noted that these policies differ in the amount of coverage afforded to the driver during the time period that they are waiting around to be called and not actively on their way to pick up a passenger or carrying a passenger. During that time period, the amount of liability coverage could drop to as low as $50,000.

Injured in a Ridesharing Accident?

If you are injured by the negligence of an Uber or Lyft driver during a rideshare, you should feel comfort knowing that the driver should have adequate insurance available to compensate you for your injuries. But, just because a large amount of coverage is available does not mean that the company will simply hand money over to you. You will need an experienced advocate to fight on your behalf. Call us. We're here to help and are available 24/7.

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Sources: "An Analysis of the Labor Market for Uber's Driver-Partners in the United States." Jonathan Hall and Alan Kreuger. January 22, 2015.
"Uber agrees to pay $28.5 million over safety claims lawsuits." Douglas MacMillan. The Wall Street Journal MarketWatch. February 13, 2015.
"Certificate of Liability Insurance." UberComms. Scribd. July 22, 2014.
"Insurance Policy." Lyft. March 12, 2016.
"Insurance for UberX with Ridesharing." Uber.newsroom.com. February 14, 2014.
"Ridesharing Insurance Policy." Ubercomms. Scribd. July 22, 2014.
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