Uber, Ridesharing, and Auto Insurance Dangers

Whether you are someone who is already using Uber, someone who drives for Uber, or someone who is considering working with the ridesharing service in some capacity, it is important to realize the potential gaps in insurance coverage.

We have seen blogs on the internet noting:

  • “As a rideshare driver you are 100% covered if you get into an accident.”
  • “I still see articles and comments popping up from time to time that say you’re not covered if you get into an accident while driving for Uber and Lyft. That is 100% false; you’ll be covered.”

The problem is that these statements are simply not true. There is a gap in coverage during the time in which a driver is on duty but hasn’t been matched up with a passenger yet. This is known as Period 1 in ridesharing terminology.

During this period, Uber will provide $50,000 coverage per person for bodily injury liability and $100,000 coverage for bodily injury per accident. They will also provide $25,000 property damage liability. The problem? Your car is not covered for collision during Period 1. In addition, you won’t have coverage to pay for your own injuries should you cause an accident during Period 1 because Uber’s policy is only covering liability to others.

Your personal auto policy will most likely exclude coverage for this gap as well. Most policies have language specifically excluding coverage when an auto is used as “public or livery conveyance.”

We urge our clients to be extremely cautious when considering a ridesharing service. While this trend certainly has its benefits, there are also some gray areas and potential dangers – insurance and otherwise – associated with this loosely regulated industry.