Claims And Insurance issues with Rideshare Companies
The concept of ride sharing is new and the industry is still unregulated, this can result in high chances that a ride share driver is underinsured as compared to a regular cab driver. In most cases the cabdrivers are employees of taxicab or limousine companies and have company and insurance benefits. Whereas the rideshare drivers are independent contractors who are self-insured and don’t fall under the company insurance scheme. Hence in event of an accident or injury due to the negligence of a rideshare driver, there are chances that the rideshare drivers insurance is insufficient and the company may refuse to pay for the expected compensation. The insurance policy may also include a “driving for profit” clause.
Many rideshare companies’ claim of taking around $1 million in supplemental coverage, however most insurance companies have warned many clients that the “additional coverage” may not cover payment for medical bills. The coverage also does not cover an off duty driver.
In a ride sharing accident in California, a driver for enrolling with a taxicab company is required to have liability insurance of $50,000 per person and $100,000 per accident. Drivers working with Uber and Lyft are required to maintain an additional coverage of $200,000. Drivers taking request or picking up passengers are required to have a liability insurance coverage of $1 million and uninsured/underinsured motorist coverage of $1 million.
Though this looks like a huge amount, one million dollars is just a small amount as compared to the total medical bills and future costs of medical treatment and care of a person involved in a tragic ride share accident, who has undergone immense pain and ability to earn. And if the number of victims involved or vehicles involved are more, then million dollars is a small amount to cover everyone.