Frequently Asked Questions - What are The Insurance Coverages For Car Accidents Involving Vehicles Driven As Lyft and Uber Service Vehicles?
With economic circumstances being what they are, and the erosion of traditional forms of earning a living seemingly accelerating, the average American is having to supplement their income with a second, even third, jobs to make ends meet. One such means of earning a living is using their personal automobile to transport passengers. This is usually done thru the more nationally known companies like Lyft and Uber. This 21st-century version of the taxi service naturally gives rise to certain unique questions and issues. For instance, what happens if I get into a car accident while I am using my personal vehicle to drive for Uber or Lyft? What are the insurance coverages for car accidents involving vehicles driven as Lyft and Uber service vehicles? In another article, I address the first question. This article addresses the second of those two questions.
What are the insurance coverages for car accidents involving vehicles driven as Lyft and Uber service vehicles?
As most drivers in this state already know, under Florida law any resident who owns and operates a motor vehicle within this state, or any nonresident owner who has been in the state for 90 of the last 365 days, must have certain minimum insurance coverages. A great deal of political controversy has existed over the question of what and how much those minimum coverages should be. At present, according to Florida Statute 324.021(7), every automobile owner must have $10,000 in Personal Injury Protection insurance. This type of insurance is often called PIP or “No-Fault” insurance. PIP insurance pays for 80% of the owner’s medical bills and 60% of the owners lost wages from a car accident, up to a total of $10,000 per accident. Every owner must also have a minimum of $10,000 in property damage insurance. Property damage insurance will pay for the damage to the other owner's vehicle caused by the at-fault owner’s negligence.
Other coverages can be purchased as well, but these are not mandatory under Florida law. These include Bodily Injury liability coverage. So-called “Bi” coverage provides insurance to pay for personal injuries and associated damages caused by the negligence of the at-fault owner or driver in a car accident. Underinsured or uninsured motorist coverage, also known as “UM” insurance, compensates the policyholder/owner of the car for their own personal injuries caused by the negligence of the at-fault driver or owner, where that other at-fault driver or owner either has no Bi insurance or a Bi policy so small that it doesn’t adequately compensate the injured person for all their damages.
Whether one or both of the car owners involved in a car crash are Lyft or Uber drivers at the time of the car accident can affect how these coverages pay out insurance benefits as outlined above. This is because there is almost always the language in your own personal auto policy which effectively excludes all of these coverages from applying if at the time of the crash you are working as a Lyft or Uber driver. Most personal auto policies expressly exclude coverage for yourself and your family if at the time of the car accident you were using your automobile to transport others for hire. The reason for this very common exclusion in most auto policies is a basic risk analysis calculation.
You see, the premium you pay for your automobile insurance under your own personal auto is based upon an estimate of the number of miles you drive on average for yourself, on your own personal reasons. From the insurance companies’ point of view, if you are also earning a living by running a business as a taxi driver in your own personal automobile, then you are driving double, triple, or even quadruple the number of miles you would otherwise be driving for your own personal use. Therefore, you are that much more likely to be in a car accident and, thus, are a greater risk to the insurance company of having a claim. The greater the risk of a car accident the higher the premium they need to charge you to cover the risk. For these reasons most personal automobile policies expressly exclude insurance coverage for accidents while driving as a Lyft or Uber driver. Always check your own policy carefully, or ask your auto insurance agent specifically, whether driving your personal automobile in a Lyft or Uber type arrangement will cause your coverage to be excluded or even voided altogether.
Fortunately, this reality of the insurance business, and the typical exclusions under personal auto policies applying to drive-for-hire, was taken into consideration by the Florida legislature and the governor in 2017 with the passage of Florida Statute 627.748. 627.748 applies to all “transportation network companies” using a “digital network” to schedule “prearranged rides” for persons using their own personal automobiles. This law requires that companies like Lyft and Uber provide both the PIP and property damage coverages for the drivers within their networks. The law also mandates that Lyft and Uber-type companies provide Bi insurance coverages for the owner of the vehicle driving as a Lyft or Uber-type driver. The exact coverages depend upon whether the driver has a passenger at the time of the crash or is simply logged into the transportation companies’ network, without a passenger, but awaiting one.
According to subsection (7)(b) if a driver is simply logged into the network, without a passenger, but awaiting a “prearranged rider”, and has a car accident the company must provide insurance with $10,000 in PIP, $25,000 in property damage, $50,000 in Bi coverage per injured person and $100,000 in Bi coverage per accident. The company can, if it chooses, also purchase UM insurance. My experience for the last 3 years is that most Lyft and Uber drivers have been covered by Lyft and Uber policies with some amount of UM coverage, although that could change.
According to subsection (7)(c), if a driver is logged into the network, and actively transporting a passenger, the company must provide insurance with $10,000 in PIP, $25,000 in property damage, but must also have Bi coverage of $1 million dollars per accident. Again, the company can, if it chooses, also purchase UM insurance which, up to now, usually is the case.
Obviously, operating your own automobile as a driver for hire within a transportation network company creates risks. Perhaps the most significant is the loss of coverage from your own personal auto insurance policy if you are working and get into an accident. While 627.748 mandates that certain insurance coverages apply, they are unlikely to be the same as those you consciously purchased for yourself. For instance, 627.748 does not mandate that Lyft or Uber-type companies purchase UM insurance that protects you if you are injured by a negligent driver. If you were wise enough to buy UM insurance under your own policy, it may not apply. The caution then is to carefully read and understand what coverages are provided by your Lyft or Uber-type company before you begin working in their network understand that you are very likely leaving your own personal automobile policy coverages behind. But you should always remember that the experienced attorneys and staff at Trial Pro, P. A. are here to help you, 24 hours, 7 days a week should you need us.