Rideshare companies like Uber are just as ubiquitous as taxis these days in most cities including Dallas. Uber connects people needing a ride with drivers of private vehicles who have been vested and provide taxi services under the Uber brand.

The concept has exploded and competitors like Lyft and Sidecar have followed suit with their own variations. But what happens when there is an accident?

In the past couple of years, ridesharing companies have been publicly criticized for failing to provide sufficient insurance coverage in the event one of their vehicles is involved in an accident. Under current law and pursuant to the policies of the ridesharing company, the available insurance coverage depends on whether or not a driver has been matched with a passenger. If a ridesharing driver is waiting to be matched and gets into a serious accident, it’s likely that the ridesharing company will not provide coverage, and instead rely on the driver’s personal policy. If the accident occurs while a paid ride is being provided, the ridesharing company’s insurance policy most likely will apply to cover the accident.

Uber infographic illustrating coverage triggers for drivers.

(Image source: Uber Blog, February 2014)

An interesting scenario was raised on this topic at policygenius.com/blog from the perspective of the Uber driver:

Consider this insurance horror story:

Someone pulls up an app on their phone, types in the address of where they need to go, and orders your car. You turn around and drive to pick them up.

While you’re driving, you look over to your phone to make sure you’re still heading in the right direction. While you’re looking the other way, you hit a car. It’s not a big accident (luckily), but it’s bad enough that the other driver calls the police (and you have to cancel your pick-up).

The police get there, they take down all of your info, including the fact that you were driving for a company called “Uber.” You submit your claim to your auto insurance company and go about your life.

A few days later, your insurance company calls you. Unfortunately, your claim has been denied because you were performing a business activity. You’re now on the hook not only for your own car repairs, but the other driver’s, too. Oh, and by the way: your car insurance policy has been canceled.

You contact Uber to see if their insurance policy is going to cover the damages. Nope, says the woman on the other end of the phone. Since you didn’t have a passenger in the car, they’re not liable. Consider yourself lucky you didn’t hurt anyone.

Adam Cecil, The insurance secret that Uber doesn’t want you to know, policygenious.com blog

Some states are starting to pass legislation that requires insurance coverage in certain situations involving ridesharing companies. However, the legal issues are far from settled. Currently in Texas, accidents involving ridesharing companies are evaluated on a case-by-case basis and coverage depends on the circumstances.

If you are a driver with a rideshare company or a passenger who’s been hurt in an accident involving a car in the service of a rideshare company, call us to talk about your options. The Barber Law Firm has experience representing cases with specialized circumstances like these.