Harry here. Insurance isn’t something most people think about until it’s too late, and that is especially true for rideshare insurance. Today, RSG contributor Scott Van Maldegiam shares a few real-life scenarios where rideshare insurance can play a huge role. In just the last few months, dozens of new options have become available for rideshare insurance, so I encourage you to get a quote from one of the agents on our rideshare insurance marketplace.
I get it. No one wants to think about what will happen in the case of an accident. As rideshare drivers, we are either apathetic or, more likely, burying our heads in the sand. When I first started out at as a rideshare driver, I was the latter. I had concerns about insurance and if I was covered, but the money was good so I put it in the back of my mind until… I had an accident with a taxi driver. I was not at fault, but the taxi did leave the scene. Thankfully, I was quick thinking and was lucky enough to have a witness who was willing to get involved. All my damages ($700) were covered, but I was lucky. The police officer who took the accident report said I was wasting my time and I would never recover a dime from a taxi insurance company. He was wrong because I was relentless, but this was a wake up call. Many drivers have received their own wake up calls regarding rideshare insurance but with worse results.
We receive a lot of emails from our readers after they have had one of these wake up calls wishing they were aware of the risks prior to having an incident. I hope this article will help prevent at least a few rideshare drivers from having an unfortunate incident made worse by not being properly covered.
Let’s look at a few examples of what can and has happened.
Accidents During Period 1
If you have read any of the articles about rideshare insurance, you know that period 1 is the time in which the app is online, but there is not an active request. This is the period of time that Uber and Lyft provide minimal contingent liability coverage (unless state legislation has mandated something else). If you are in an accident and a claim is filed, it will have to go to your personal insurance company. Most insurance companies, once they find out that you are driving for Uber or Lyft, will cancel your policy unless you have a policy that specifically allows it. If you have your insurance cancelled, it becomes more difficult to find competitive insurance rates as you may be considered a higher risk. Here’s what can go wrong during Period 1:
Accident with an Uninsured Driver
During period 1, Uber and Lyft’s contingent coverage does not provide uninsured/underinsursed insurance OR collision. This means that even though you may not be at fault, if the person who hit you either leaves the scene and/or is uninsured, you will most likely be on the hook to cover your damages even if your car was parked. You might be eating at your local favorite eatery, just about to finish and you turn your app on. If someone hits your car while your app is online even though you aren’t even behind the wheel, you will be responsible for your own repair costs if the driver that hit your car is uninsured.
Insurance companies are much more aware of Uber and Lyft now so they may ask if your app was online at the time of the accident.
This has the exact same repercussions as the last example, except if the other party has extensive property damage or injuries. The minimal contingent coverage that Uber and Lyft provide can easily be exceeded. They only provide $50k injury/$100k total/$25k property contingent coverage. You would be liable for all claims that exceed that coverage.
Real Life Example
I received this example from one of the agents on our insurance page. Thank you, Thachvu, for providing the information.
“An Uber driver came to me after she was in an accident during period 1. It was morning traffic so everyone is doing a million things from eating, putting make up on, shaving, etc. She was stopped at a traffic light. The light turned green but the driver in front of her had not gone. The car behind her was not paying attention and rear ended her. The person pretended to pull over and took off, leaving her to call Uber. Uber told her to call her insurance company, which declined coverage and sent her a cancellation letter. Uber declined the coverage because it was period 1. Her Uber account was deactivated until she fixed the car, which cost her a total of $3,400. “
If she had an auto insurance policy that at least covered Period 1, she would have had her damages covered minus her collision deductible.
It has been well documented that insurance companies are not afraid to drop drivers who are rideshare drivers. I polled the agents on our insurance page and every agent had many examples of drivers who had been dropped for being a rideshare driver because their insurance company found out somehow. Getting dropped is not a good thing and may disqualify you from receiving the best rates available. It is best to obtain a rideshare policy/endorsement prior to rideshare driving.
Related article: Essential gear every rideshare driver should have
I was in an accident in December where I totaled my 2013 Ford Escape. The vehicle totaled out at about $17k and I had a loan for around $14k. Who was most at fault is still being determined by the two insurance companies (a police car caught the accident on tape), but let’s assume I was at fault. I was on my way home from my current job and was not rideshare driving. I have a clean conscience so if my insurance company wants to check with Uber or Lyft, I don’t mind, but… I have been at that intersection many times much more tired than I was on that night and with my Uber and Lyft apps online. If this had happened on one of those nights and I didn’t have rideshare insurance, my car loan would have been called due and I would have been unable to obtain a new vehicle. Also, the other person was uninjured but did go to the hospital as a precaution since his airbag went off. This would have been covered by the contingent liability insurance along with the damage to the other vehicle.
Every time we get behind the wheel, we take a risk. This is why we all need to have auto insurance. When we are driving for Uber and Lyft, we need to make sure we are protecting ourselves just as well. Many of us have families that we provide for and Uber and Lyft is a vital primary or secondary income. This means that we need to make sure we protect our families from the risks.
For those that haven’t experienced any of these bad affects of insurance, I hope this serves as a wake up call for you. You can find a full listing of insurance options by state and recommended agents on our insurance marketplace.
Readers, do you have rideshare insurance and, if so, what prompted you to get it? If you don’t have rideshare insurance, why not?
– Scott @ RSG
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Scott Van Maldegiam
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