Transportation network companies (TNC) like Uber or Lyft are peer-to-peer ridesharing services that connect drivers with passengers through a smartphone app. Distinguishable from taxicab operators, Uber and Lyft drivers use their own vehicles to transport their passengers. Thus Uber and Lyft drivers use their own personal automobile insurance and obtain supplemental coverage from the TNC. Whether you are a passenger or driver, the person who causes an automobile crash is responsible for your injuries. However, automobile insurance companies may disclaim coverage based on the type of insurance the driver carried at the time of accident, leaving the injured party without redress.
Law in California
Up until recently neither the driver's automobile insurance company nor the Uber or Lyft automobile insurance company would cover accidents. This time period, referred to by lawmakers as period one, is the period of time between when the driver turns on the ridesharing app up until the time the driver agrees to a ride or is matched with a passenger, was not covered. So, if the driver was injured following an automobile crash or caused property damage during this time period neither the TNC nor his or her own automobile insurance company would cover damages resulting from the accident.
On July 1, 2015 AB2293 was passed addressing this gap in insurance coverage. Now Uber and Lyft are required to provide liability coverage during this time period to pedestrians or other cars and passengers involved in an automobile crash with an Uber or Lyft driver. This coverage does not include personal injury or property damage to the Uber or Lyft driver. Furthermore, no collision or comprehensive coverage is offered by Uber or Lyft during period one to anyone.
Uber or Lyft Driver Options
Many personal automobile insurance policies specifically exclude or do not cover accidents that occur while the driver is driving for pay or hire. If your policy disclaims driving for hire, you need to purchase supplemental commercial driver's insurance for an extra cost. California now requires Uber and Lyft drivers to purchase endorsement or supplement insurance. This insurance only covers the timeframe contemplated in period one.
Hailing a cab from the street in not permitted on peer-to-peer ridesharing services or TNCs and specifically prohibited by law in California. If a passenger hails an Uber or Lyft and is injured in an automobile accident, there is no TNC automobile insurance coverage available to the passenger. The passenger may not be able to file a claim against the driver's personal automotive insurance policy because most personal policies exclude situations where a driver drives for pay or hire.
What to Do if You are Involved in a Car Crash While Driving a TNC
If you drive a TNC and are involved in an automobile accident contact a lawyer to help you determine automobile insurance company coverage of the accident or claim. Timing is critical in these types of accidents.
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