Yes! There are some hidden dangers when using ride-share services. Almost everyone I know now has either Lyft, Uber or some type of ride sharing app on their smart phone. It’s quick, easy and no cash is needed. What could be wrong with that?
After doing some research, and reaching out to our auto insurance partners, I was shocked to find out that as a passenger I may be putting myself at risk if injured while traveling in a ride-share vehicle. Unfortunately many of the drivers are unaware of the liabilities and this is why, unlike a regular licensed taxi, these rideshare drivers use their personal vehicles and do not carry commercial insurance coverage.
If you are traveling in a ride-sharing vehicle, and it becomes involved in an accident, your injuries may not be covered. The driver is required to have commercial auto insurance to become a driver. What many of these ride-share drivers do not realize, or ignore trying to avoid higher insurance premiums, is that their regular auto insurance will not cover anything when the vehicle is being operated for any type of business use. Most insurance companies offer an additional rider or addendum to cover the vehicle if being used for business purposes, but it can be costly and many drivers opt not to purchase. Others don’t even know they need this coverage.
Insurance companies now have a required question in every policy when you purchase auto insurance: “Will the vehicle be used for any ride-sharing, delivery or business use?” If answered “Yes”, the insurance company will require additional coverage, at an additional cost, by adding a rider or addendum. If answered no, which many of these drivers do, and the vehicle is in accident while being used for business use, any claims would be denied!
But wait, the ride-share companies like Uber and Lyft claim they have a $1 million policy to cover any accidents or incidents right? Yes and No. They do have such policies in place, but they are contingent policies. This means the $1 million policy will only take effect after a claim has been filed and paid by the driver’s personal policy. If the driver does not have the additional rider or addendum, their personal policy does not cover the accident or injuries, so neither will the $1 million policy held by the ride-share company. In that case the driver, his vehicle, other vehicles, property, individuals and you are not covered for any injuries or damages.
To make matters worse, when the driver attempts to put in a claim without the rider or addendum, their insurance company will immediately cancel their current auto insurance AND when they go to get a new policy the cost will be higher since now they are considered a higher risk. In other words, the driver is also at a loss and putting himself at risk of injury, financial losses, and legal liabilities.
What does all this mean? It means that as technology creates these services to make our lives easier, it is growing faster than the infrastructure needed to support it. To protect ourselves we need to be more informed, more vigilant, and much more aware of our situations. These ride-share companies are serving a purpose and filling a transportation need. Each of us needs to take the time to educate ourselves and take the personal responsibility to choose if this is your best option.