You need to be at the airport in an hour. You get out your phone, hit the app for a rideshare service such as Uber or Lyft and get back a message that your ride will be there in 10 minutes. You get your bags, wait out on the curb, and here comes the car. Everything's just as it should be.
Probably the last thing you're thinking about at that point is your insurance, but maybe that should be a little bit higher on your priority list.
Rideshare apps offer convenience and sometimes savings over traditional limousine and taxi services, but there are gray areas in their use, and insurance is one of them. If the car gets into an accident while you are the passenger, are you responsible for your own medical bills, or does the service have to pay? If you are thinking of driving for a rideshare service, will the company that owns the app pay for your insurance or do you have to obtain a special rider on your personal policy?
The answer, according to Harold Soden Jr., is that's a good question.
Soden, an insurance and risk management adviser at the Oliver L.E. Soden Agency, a Trusted Choice insurance agency in Jamesburg, said the insurance issues concerning Uber, Lyft and other rideshare services are still evolving. In many cases, he said, the current rules are either obscure or hidden. How does a driver or a rider find protection against liability? That depends, he said.
"Someone who has their own auto insurance policy would have a provision for medical payments and uninsured or underinsured motorist coverage, and that might cover some of the issues if you're using an Uber car or another service," Soden said. "Uber has a policy with a $1.5 million liability limit for when an Uber driver has a person in the car. But it's designed to protect Uber itself and Uber drivers rather than the passenger."
There are gaps that exist in the policies such companies issue their drivers, Soden added. For a traditional taxi driver, he said, "The policies are somewhat standardized. However, the insurance necessary to legally operate a taxi can be pretty low depending on the municipalities where the taxi company operates. Passengers even in those cases might rely on their own policies for medical expenses."
For liability on the part of the driver, or someone thinking of driving for a rideshare service, Soden advised caution. "There are no insurance companies right now that will continue to insure you if you drive for Uber or Lyft or something like them," he said. "Progressive (Insurance) offers a special policy for drivers, but it will probably be more expensive (than personal auto insurance)."
Soden said Uber will cover its drivers while they are using the company's app to find a fare and while the passenger is in the car. "We don't have the actual wording of that policy beyond the liability limit provided ($1,500,000). There can be unknown exclusions in the actual policy," he said. "Lyft advertises that in some cases their drivers will bring you food or help you carry something inside. I see a real coverage gap there."
The first step for passengers and drivers is to always talk to your insurance agent. Individuals who don't have a dedicated agent, should consider speaking with a Trusted Choice independent insurance agent to learn about the intricacies of their policy and identify if additional coverage may be needed. Drivers and passengers who need to contact a local Trusted Choice independent insurance agent can find one by searching their zip code at TrustedChoice.com.
Jeffrey Cohen