Uber and Lyft, the popular ride-sharing apps that permit private car owners shuttle passengers for pay, are both challenging local, state and federal auto and insurance regulations.
The two California-based technology companies are besieged by lawsuits in too many jurisdictions to count.
The legal issue at stake is what insurance policy will cover an Uber or Lyft driver who becomes involved in an accident while working, but not carrying passengers.
Drivers for the two companies turn on their company provided cellphones and wait for riders in the vicinity to hail a ride.
However, Uber and Lyft only provide insurance coverage to drivers when a passenger is in the car. If the driver is involved in an accident on the way to a call or while waiting for a call, then the companies do not provide coverage.
Unfortunately, the drivers’ personal insurance coverage will not apply if the driver has the app on and is waiting to pick up riders. Personal insurance companies state that the driver is engaging in commercial activity, and commercial activity is not covered under most personal insurance plans.
Uber, Lyft & Major Insurance Companies Reach Agreement
While legislators all over the country are trying to figure out how to make up the gap coverage issues that have been identified, the two technology companies have been quietly working to come up with a viable framework.
Major insurance companies, along with several trade groups and have cobbled together a legislative proposal backed by both Uber and Lyft. The proposal mirrors a law that will take effect in California beginning July 1, 2015.
The California Department of insurance has worked with the insurance companies in the state to create policies to address what is being called Period 1. Period 1 concerns that time that a personal driver is not carrying a passenger, but the app is still on.
The new law, AB2293, will require personal policies to set out minimum insurance coverage for Period 1. The minimum coverage rates include:
- $50,000 minimum for injury to a single person
- $100,000 minimum for injury to multiple persons
- $30,000 minimum for property damage
It is vitally important that these insurance coverage issues are resolved in a manner that keeps residents of Arizona safe. Phillips Law Group attorneys are paying close attention to these issues, in order to better serve car accident victims.
If you or someone you love has been involved in an auto accident involving an Uber or Lyft driver, contact our law firm today for a free consultation.
Call 1-800-706-3000 24/7.