Rideshare companies such as Uber and Lyft are increasingly popular alternatives to traditional taxicabs. In some cases, they have even replaced car ownership, as consumers seek to reduce their transportation expenses while still remaining mobile. Ridesharing services also provide a boost to local economies by letting non-professionals—such as students and others in need of supplemental income—take on part-time work as drivers in their own personal vehicles when it’s convenient to their life schedules.
However, this surge in popularity also means that the roads are now flooded with amateur drivers who are suddenly operating on a commercial basis. The already murky legal basis of ridesharing services means that when an accident happens, insurance claims can be confusing and difficult to navigate for those who have been hurt. What kind of insurance coverage do rideshare drivers need, and who is responsible for damages when something goes wrong on the road? Here’s what you should know.
Ridesharing Insurance Coverage
There have been a lot of legal questions about insurance and liability in rideshare accident cases. Is personal auto insurance enough, or should commercial insurance be required? Should the ridesharing company bear some responsibility, even though it claims that drivers are “independent contractors?” Is liability different when a driver is “on-duty” without a passenger versus when a passenger is in the car? What about when the driver is in transit to pick up a rider?
While in some places, the law has been slow to react to the changing needs of the marketplace and answer questions like these, Texas isn’t one of them. In 2016, the state enacted laws detailing increased insurance needs for rideshare drivers, and it was decided that basic personal liability simply isn’t enough. Now, Texas rideshare drivers must carry a minimum of $50,000 in liability coverage per person, up to $100,000 per accident, plus $25,000 in coverage for property damage. The state also requires at least $1 million in coverage when carrying a customer or on when the way to pick one up.
Liability for Rideshare Accidents
Determining who bears the liability in a ridesharing accident can be complex, since there are multiple insurance situations that can occur that affect who pays. Some of those situations may include the following:
- The driver is on duty, but is not assigned a fare. In this case, it’s most likely that the driver’s own personal, commercial, or ridesharing auto insurance will bear primary responsibility.
- The driver is on duty and has accepted a fare. If the driver is on the way to pick up an assigned passenger, companies such as Uber and Lyft both carry $1 million in coverage, and it is typically the primary coverage. However, if the driver purchases a commercial or ridesharing insurance plan separately, the company’s insurance may only kick in if damages exceed the driver’s own plan first.
- The driver is on duty and carrying passengers. The ridesharing company’s insurance is likely to be primary coverage, unless the driver has a personal ridesharing or commercial insurance of his or her own. This coverage usually expands to include protection for any passengers aboard, too.
- The driver is off-duty. If the rideshare driver isn’t on duty and accepting passengers via the company’s app, then liability for an accident will most likely fall on his or her own personal auto insurance policy alone.
Whether you’re a passenger in a rideshare that’s involved in an accident or you’re a third party who was struck by a rideshare driver, the issue of which insurance carries responsibility for the accident can get complicated quickly. A personal injury attorney who understands this rapidly evolving field will be able to help you determine who is responsible for paying the compensation you may be owed after a crash.
Get Legal Help After a Ridesharing Accident
If you’ve been hurt in an accident with a rideshare driver, Wayne Wright LLP would like to hear from you today. Our experienced legal professionals are here to help you seek compensation after an accident caused by someone else’s negligence, recklessness, or carelessness, including payment your medical bills, physical therapy, repair or replacement of your vehicle, pain and suffering, and more. To arrange a free, no-obligation consultation with us today, call by phone, use our contact form to send an email, or click the live chat box on this page right now.