Share My Ride: Liability and Coverage Issues for Lyft and Uber

The car with the pink mustache pulls up outside your house, and the app on your phone alerts you that the driver has arrived. You go outside and hop in the car with your friends to go out for some drinks. You’ve made a safe, responsible choice to use a driver to avoid driving while intoxicated. On the way, though, your driver isn’t paying attention and causes an accident. You suffer spinal injuries resulting from whiplash. You sustain head trauma and suffer from concussion-like symptoms. All of the sudden, you’re dealing now with injuries, medical treatment, insurance companies, and liability disputes. What happens? Who covers the costs of treatment? Is the driver’s personal policy implicated? Does Lyft provide coverage? Thankfully, Colorado has answered these questions.

In January 2015, Colorado became the first state to pass laws regulating ride-sharing companies like Lyft and Uber when it passed the Transportation Network Companies Act. This was the second time in recent memory that Colorado had become one of the first states to expressly legalize and regulate something, but you may only remember hearing about the first one. The law requires ride-sharing companies like Lyft and UberX to carry liability insurance for all of their drivers, conduct background checks of drivers, and obtain operating permits.

But individual drivers’ policies are still implicated. There are distinctions made for when liability coverage must come from the policy that the company is required to carry versus when that coverage may come from a Lyft or Uber driver’s personal automobile policy. The company’s policy is the primary source of coverage for incidents that occur during the actual ride (that is, from the moment a driver accepts your request for a ride to the moment the ride is complete). The law requires that the coverage during the prearranged ride be at least $1 million per incident. If the driver causes an accident or injury during that prearranged ride, then that $1 million dollar policy is the primary source of liability coverage.

But what about when a Lyft or Uber driver is logged into the app and is “on the clock” waiting for a ride, but has not yet accepted any requests. What if a Lyft or Uber driver causes an accident or injury while he or she is driving around waiting to be called? In those cases, either the driver’s personal policy—one that must expressly recognize that the person drives for a ride-sharing company—or a company policy can be the primary source of liability coverage. But the law establishes minimum amounts of coverage no matter if it’s a personal policy or company policy. There must be minimum coverage of at least $50,000 per person in any accident, coverage of at least $100,000 per accident, and coverage to a limit of at least $30,000 for property damage, i.e., damage to another person’s vehicle.

The good news, then, is that Colorado residents enjoy certain protections established by these laws. There are insurance policies that are required to be in place to cover you any time you’re riding in a Lyft or Uber. But as with any claim under an insurance policy, people injured in accidents caused by Lyft or Uber drivers still have to deal with insurance adjusters acting on behalf of the company, and often they will try their best to delay and deny claims. If you’ve been injured in an accident caused by a driver for Lyft or Uber, it is in your best interest to consult with an attorney and go over the process and what potential claims you may have. An attorney can help you navigate the process and make sure the insurance company treats you fairly. We have experience handling claims against ride-sharing companies. Feel free to contact us for a free consultation.