What You Need to Know About Rideshare Insurance – And How It Could Change
If you’ve ever taken an Uber or Lyft, you probably assumed that you’re protected in the event of an accident. And for the most part, you are. As of now, both companies carry up to $1 million in insurance coverage that applies during certain phases of a trip. But what happens if those insurance policies change?
Learn how rideshare insurance currently works, what could happen if companies like Uber and Lyft revise their coverage, and what steps you can take to ensure you’re protected – whether you’re a rider or a driver.
How Insurance Works When You Ride with Uber or Lyft
Rideshare insurance policies are structured around the app’s activity. The coverage changes depending on whether the driver is waiting for a ride request, on their way to a pickup, or actively transporting a passenger. Here’s a basic outline:
- App Off: The driver’s personal auto insurance is the only active coverage.
- App On, Waiting for a Ride: Limited liability coverage (e.g., $50,000 per person/$100,000 per accident for bodily injury, and $25,000 for property damage).
- Ride Accepted or Passenger in Car: Up to $1 million in liability coverage through Uber or Lyft, which may also include uninsured/underinsured motorist (UM/UIM) coverage and contingent comprehensive and collision coverage (if the driver has that coverage personally).
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What Insurance Changes Could Mean for Riders and Drivers
There has been recent discussion around insurance reform proposals that could impact how much coverage rideshare companies are required to provide. In fact, you may have even seen an email petition about it. If any changes are adopted, coverage limits could be adjusted, or the circumstances under which the $1 million policy applies could be narrowed.
For example, if future policy adjustments were to lower the liability limits or change when they apply, a person involved in an accident might find themselves relying more heavily on their own insurance – or on the driver’s personal policy – than they do today.
These proposals have been circulating in response to rising costs in the rideshare industry, but no formal policy has been adopted as of this writing. Still, it’s wise to understand how even small changes to liability rules can affect everyday riders and drivers.
Understanding Uninsured vs. Underinsured Motorist Coverage
Whether or not these changes go into effect, there are steps you can take right now to safeguard yourself. It starts with understanding two key types of coverage: uninsured and underinsured motorist protection.
- Uninsured Motorist (UM) Coverage: Protects you if you’re in an accident with a driver who has no insurance at all.
- Underinsured Motorist (UIM) Coverage: Applies when the at-fault driver has insurance, but not enough to fully cover your damages.
In a rideshare scenario, if a driver with minimal coverage causes a serious accident and the rideshare company’s coverage does not apply (or is reduced in the future), UM/UIM coverage on your own auto policy may be the fallback that helps cover medical expenses, lost wages, or other damages.
“We see a lot of people come to us after an accident who assumed they were fully covered,” says Jason Javaheri, Co-Founder and Managing Partner at J&Y Law. “Understanding your coverage before something happens can make all the difference.”
How to Stay Informed and Protected
Reading policy updates from Uber or Lyft may not be the most exciting part of your day, but it’s one of the easiest ways to stay informed. These updates often include important changes that could affect your coverage, and they’re typically delivered via email or through the app.
Another helpful step is to take a closer look at your own auto insurance policy. Specifically, review your uninsured and underinsured motorist limits to ensure you have enough protection if the unexpected happens. If you have questions, your insurance provider can help walk you through your options.
And if you ever find yourself confused about your coverage – or want help making sense of how a change might affect you – consider talking to a legal team like J&Y.
Yosi Yahoudai, Co-Founder and Managing Partner of J&Y Law, adds, “Our goal is to educate riders and drivers so they feel empowered. Insurance can be complicated, but the right information makes it a lot more manageable.”
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What Does the Future of Rideshare Insurance Look Like?
While Uber and Lyft currently provide robust insurance policies during active rides, it’s possible that coverage levels or conditions could change in the future. Staying informed, reviewing your own insurance, and understanding key terms like uninsured and underinsured motorist coverage are the best steps you can take to protect yourself.
For questions or guidance, reach out to J&Y Law 24/7 by calling (877) 596-5851.
FAQ: What type of insurance coverage does Uber or Lyft provide during a ride?
Uber and Lyft typically provide up to $1 million in liability coverage while a ride is in progress—that is, after a driver has accepted a ride request and is either en route to pick up the rider or transporting them. This coverage may also include uninsured/underinsured motorist coverage (UM/UIM) and contingent collision/comprehensive coverage for the driver, depending on their personal policy.
FAQ: What happens if I’m in an accident with an Uber or Lyft driver who hasn’t accepted a ride yet?
If the app is on but no ride has been accepted, Uber and Lyft offer limited liability coverage (e.g., $50,000 per person, $100,000 per accident, and $25,000 for property damage). In this phase, you may need to rely on the driver’s personal insurance or your own policy—especially if future policy changes reduce coverage levels.
FAQ: What is the difference between uninsured and underinsured motorist coverage?
- Uninsured Motorist (UM) Coverage helps if you’re hit by a driver who has no insurance at all.
- Underinsured Motorist (UIM) Coverage applies when the at-fault driver has some insurance, but not enough to cover your total damages.
Both are important if you’re injured in a rideshare accident and the driver’s coverage or the company’s policy doesn’t fully cover your costs.
FAQ: Could Uber or Lyft change their insurance coverage in the future?
Yes, rideshare companies could adjust their coverage policies based on proposed legislative or internal business decisions. While no official changes have been made yet, some proposals could reduce liability limits or narrow the conditions under which high-limit coverage applies. Staying informed through emails or app updates is key.
FAQ: How can I protect myself if rideshare insurance policies change?
You can protect yourself by:
- Reviewing and increasing your UM/UIM limits on your own auto policy.
- Reading updates from Uber or Lyft carefully.
- Consulting a legal professional if you’re unsure about coverage.
Even if rideshare coverage changes in the future, strong personal insurance can help close any gaps.
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