If you use have an accident with a driver for shared ride services like Uber in California, how does the liability insurance work? Uber and other transportation network companies are required by California law to carry one million dollars in full coverage liability insurance. Dealing with car insurance companies can be difficult, even in commonly occurring accident situations between licensed drivers. When you have an accident involving companies like Uber, the issues can quickly become complicated. Uber has had a long history of issues regarding driver registration and regulation issues.
Uber is a Technology Company Not a Transportation Company.
Part of the trouble is that the private vehicles Uber uses for its on-call service are usually not registered as commercial vehicles. The drivers do not need commercial driver’s licenses. Currently, in fact, the courts have been viewing Uber, not as a transportation company, but as a technology company that just provides software to drivers and the public so they can communicate to arrange carpools. This is a handy legal device for an industry that appears to be competing head-to-head with taxi services. Courts in the European Union have ruled the Uber is a transportation company but the issue is still contentious.
In 2015 the California Department of Motor Vehicles issued an “advisory” to ridesharing companies that drivers must have commercial license plates on their vehicles. This advisory strengthens the view that Uber is a transportation company in competition with licensed taxi companies. This advisory is expected to make recruiting drivers for Uber to be more difficult. An advisory has an ambiguous legal status and its effect may lead to ambiguity.
Uber Drivers Are Not Uber Employees.
There are many legal wrinkles in the insurance for Uber drivers. The procedure is that accident claims must first go through the driver’s personal insurance. The personal insurance usually covers the claim for your damages. If the personal insurance company denies the claim, the driver can file a claim on Uber’s supplementary policy. The courts are still working through the question of whether Uber drivers are employees. It may be settled in California, but those claims to Uber’s supplementary policy are sometimes hard to recover because Uber does not list its drivers as employees, but independent contractors. Uber disclaims responsibility for the driver’s accidents or issues. In accident situations, victims have had to resort to lawsuits and the issues around settlements are not clear.
Uber Offers Primary Liability Insurance and Contingent Collision/Comprehensive Insurance.
Ordinary auto insurance policies do not cover the kind of commercial use of vehicles that Uber operates. The company, Uber, itself provides a supplementary insurance policy to cover its drivers and passengers. When Uber drivers are just driving their cars, not for Uber, they are just covered by their own personal liability policies. Once the driver accepts a passenger, the supplementary policy kicks in to a value of $1 million from the time the driver goes en route to pick up the passenger until the ride is complete. Drivers are covered by the Uber Insurance Policy for liability. Uber describes this insurance as a “primary policy.” In case of an accident Uber’s policy is supposed to take effect before the driver’s personal insurance does. Uber offers collision and comprehensive insurance to cover damage to the driver’s vehicle. The insurance has a $1,000 deductible and is payable only after the driver’s own policy rejected the claim. The amount of collision damage varies by state. In California, coverage is $30,000.
If you have an accident with an Uber vehicle or that of any ride-sharing company, the status of the driver as an employee is not crystal clear. If you have an accident, you will be insured for liability, but the coverage may be unclear and may be hard to collect. Collection of claims for damage may be complicated. You should probably contact a lawyer to work through the issues with you.
Freeman & Freeman, LLP personal injury lawyers are based in Los Angeles but represent clients throughout Southern California. They have the resources and experience to help you pursue compensation after an injury caused by someone else’s negligence. Please contact us to learn more.