Ridesharing companies like Uber and Lyft have become extremely popular in Sacramento. Uber, which was a $19-million company in 2007, has exploded into a tech giant that made $6.5 billion in revenue by 2016. It seems like Sacramentans, fed up with traffic and taxis, were waiting for a ride-hailing service.
While the people of Sacramento, have embraced this affordable and convenient method of getting around, ride-hailing vehicles carry the same accident risks as you’d face with any other car. On top of that, accident cases involving ride-hailing service companies involve more complications than typical car crash cases. Whether you’re a passenger or a driver, if you wind up injured in an accident involving Uber or Lyft, you should know exactly what to do when filing for damages.
If You’re an Uber/Lyft Driver
As a rideshare driver, legally, you’re not an employee of the ridesharing company. Instead, you’re an independent contractor. Even though self-employed contractors aren’t covered under the employer’s insurance, ridesharing companies are required to provide coverage for their drivers.
Under certain circumstances, you’re entitled to additional insurance from the ridesharing company. California’s ridesharing accident law defines certain rules on insurance coverage based on the following specific instances:
- Off-Duty: This is when the driver is inactive, with the app switched off. In this scenario, the driver is considered a private individual and has nothing to do with the company.
- Period 1: In this scenario, the driver is active, which means that the ridesharing app is on, but they haven’t yet paired with a passenger.
- Period 2: The driver has paired with the passenger but hasn’t yet picked them up. They are either driving to the passenger’s location or waiting for them to walk to the vehicle.
- Period 3: The duration that the passenger stays in the vehicle. It begins the moment the passenger enters the vehicle and lasts until they exit the vehicle.
Insurance Coverage Based on the Defined Periods
California’s ridesharing accident law requires the driver to carry insurance in this case as the driver is considered a private individual rather than an Uber/Lyft driver. The driver’s insurance should include $15,000 for bodily injury/person, $30,000 for bodily injury/crash, and $5,000 for property damage/crash.
While these are the minimums required under California law, you can increase the coverage or consider additional coverage types such as uninsured/underinsured motorist and Med Pay.
In this situation, the driver is required to carry minimum insurance. If their private insurance isn’t sufficient to cover the entire claim, ridesharing companies (both Uber and Lyft) provide up to $50,000 for personal injury or death per person, $100,000 for injury or death per accident, and $25,000 for property damage per accident.
Periods 2 & 3
For periods 2 and 3, both Uber and Lyft carry insurance coverage of $1 million to cover the driver as well as the passenger. Let’s see how the policies differ for the two ridesharing companies:
Besides the $1 million liability policy, Uber carries the contingent comprehensive and collision coverage up to the value of the driver’s car with $1000 deductible, and the uninsured/underinsured motorist bodily coverage.
Beyond the $1 million liability policy, Lyft also carries a $1 million uninsured/underinsured motorist policy along with the contingent collision and comprehensive coverage with $2500 deductible. However, the company requires the driver to file a claim against their personal insurance first. Lyft only provides coverage if private insurance is denied or insufficient.
On top of that, if you’re a ridesharing driver and your car’s damaged in the accident such that you can’t use it to earn income until it’s repaired, you can claim the lost wages from the other driver’s insurance company. This type of claim is known as the ‘downtime claim.’
What to Do if Another Driver Injures You
Suppose you’re an Uber/Lyft driver, and another party injures you in an accident. How would you handle the personal injury claim?
In this scenario, the at-fault driver is responsible for your injuries. The insurance coverage of that driver will be in effect. If your app was on at the time of the accident and had paired with a passenger (Period 2 & 3), the ridesharing company’s $1 million coverage will be applicable. However, a significant gap exists when it comes to period 1:
The Insurance Gap for Ridesharing Drivers in Period 1
If the app is on, but you haven’t paired with a passenger, the ridesharing company is not required to carry any coverage for their drivers for this time duration. Plus, you may not be able to claim your private insurance, too, since the app was on, which indicates that you’re involved in a ‘business activity.’
This situation indeed is a huge coverage gap for ridesharing drivers that can leave them exposed and vulnerable. In the worst-case scenario, the driver could be helpless if the at-fault driver is uninsured.
If You’re a Passenger
If you happen to be a passenger involved in a ridesharing vehicle accident, you’ll handle it like any other personal injury claim resulting from an accident in Sacramento.
However, your claim will hinge on whether you got hurt as a passenger in the ridesharing vehicle or, as a passenger of another car injured due to the negligence of an Uber/lyft vehicle.
Injured as an Uber/Lyft Passenger
If you were injured in an accident while traveling in an Uber or Lyft, the driver’s app should be switched on, and you’re in ‘period 3,’ which means that the concerned ridesharing company’s minimum policy coverage of $1 million will come into effect. In case the coverage limit exhausts, you can tap into your personal uninsured/underinsured coverage too.
Injured as a Passenger of Another Vehicle
If you were injured by a ridesharing driver while traveling in another vehicle, you’d need to find out whether the ridesharing driver’s app was on or off at the time of the accident. Also, whether they had picked up the passenger or not. In other words, you’ll have to check which ‘period’ the ridesharing driver was driving in.
- If the app was off, or the driver was off-duty, the driver’s private insurance policy should come into effect. You can’t claim the damages from Uber/Lyft in this case.
- If the app was turned on but was not paired with a passenger (period 1), you will either get yourself covered from the driver’s private insurance or the ridesharing company’s $50,000/$100,000 for death or bodily injury.
- If the driver had paired with a passenger, the $1 million policy coverage from the ridesharing company immediately comes into effect, regardless of whether the driver had picked up the passenger or not.
- Should these minimums exhaust, you can claim against your own uninsured/underinsured motorist coverage if these are higher than the coverage mentioned above.
While the $1 million insurance coverage by ridesharing companies seems to be a decent amount, whether it comes into effect or not depends on the pre-defined ‘periods’ that were applicable. These factors make ridesharing cases extremely complicated. And, to make things even more challenging, insurance claims are often denied or settled on significantly lower coverage than expected for simple reasons.
To combat this significant roadblock, it is highly recommended to seek legal help and get in touch with a specialized car accident lawyer in Sacramento.
The legal group of Phoong Law Corp has been helping car accident victims in Sacramento, San Francisco, Stockton, Fresno, Modesto, and Chico recover from rideshare companies. We provide a no-obligation free initial consultation to have your case evaluated. If we handle your case, there is no fee unless we win.