Rideshare companies, like Uber and Lyft, are quickly eclipsing taxis in every major city as the primary ride-hailing services. With demand higher than its ever been for rides and the easy access to the application to become a driver, more and more people are choosing ridesharing as a way to make extra money—or even as their primary source of income. While Uber and Lyft have started allowing their drivers to use rental vehicles or vehicles owned by the companies themselves, most drivers still use their personal vehicles to drive their passengers from place to place. Those drivers may be surprised to learn that the car insurance that covers them for injuries to themselves or others during their normal commute, might stop covering them the minute they start using their car for a “commercial purpose” or driving for hire. In other words, most car insurance policies stop covering Uber drivers as soon as they start driving on behalf of Uber.
In Georgia, drivers are required to maintain a minimum amount of bodily injury insurance—or insurance that covers other drivers injured on the roadway by the insured person’s negligence—in order to drive their car at all. The minimum amount required is $25,000.00. A second kind of insurance—uninsured or underinsured motorist coverage—protects the driver themselves against the negligence of other drivers on the roadway.
While insurance issues can become complicated, the most common coverages referenced above are fairly straight forward. However, when someone uses their car to make money or for a “commercial purpose” or “for hire,” the coverage may be lost and the driver may be out of luck. Many insurance excludes coverage for drivers who are using their car for business outside the scope of their normal commutes and everyday driving. That is why is it important for any driver using their car for a work purpose to make sure their insurance covers them while working.
When a driver uses their car for a commercial purpose, but has no commercial use coverage under their insurance policy, they may receive a letter that looks something like the one below.
A letter like this could mean that there is no coverage of any kind for the driver, any passengers, and any other people on the roadway. The repercussions for not having uninsured or underinsured motorist coverage are substantial. If the driver is in an accident with someone who has no insurance or does not have enough, they will not be able to recover at all for their injuries. Not having the minimum bodily injury coverage discussed above is not only harmful to the other drivers on the road, but is illegal.
Many for-hire jobs which require the use of a driver’s personal vehicle do not have additional insurance during the time the driver is working. Fortunately, companies like Uber and Lyft have insurance policies which cover their drivers while at work that are separate and apart from the personal car insurance which covers their car when not giving rides. Depending on the driver’s personal automobile insurance policy, the insurance amounts for both bodily injury and uninsured motorist coverages may be significantly higher as well. If you are injured while driving for a ride-sharing service, it is important that you talk to an experienced car accident attorney who has knowledge about the different types of insurance coverage for both Uber and Lyft.
For jobs requiring the driver to use their own personal vehicle for commercial purposes that do not carry insurance like Uber or Lyft, the driver should make sure they know what their policy says about driving for hire. Additional coverages for commercial driving are almost always available. So, each driver should call their insurance company to check their coverages before they carry persons or property for a charge.
For more information about what happens after a car crash, check out our Car Accident page.