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By Jim Adler August 11, 2016

With so many self-employed drivers for Uber, Lyft, Amazon and others on our roads, how protected are you when involved in a traffic accident with one of their vehicles? Jim Adler answers your questions about insurance claims.

First, you should know that filing an insurance claim for damages in such an accident is in many ways the same as for an accident with any other driver. You must have been:

  • Riding in a vehicle which was struck by a vehicle driven by a self-employed Uber, Lyft, Amazon or other driver
  • Riding as a passenger in an Uber or Lyft vehicle
  • Hit by a vehicle driven by an Uber, Lyft, Amazon or other driver while riding a bicycle or a motorcycle or while walking as a pedestrian
Beyond that, you must be able to establish that the other driver was negligent and thus liable for the accident, and also that you suffered damages, such as costs of an injury.

A problem is that even if the driver for a commercial firm was primarily at fault, it could be hard to recover damages from the driver if he or she has only personal auto insurance. Such personal auto insurance policies normally do not provide adequate coverage for drivers involved in commercial operations.

However, Uber, Lyft and other rideshare operations do provide drivers with commercial liability insurance for up to $1 million to protect passengers and others in case of accidents caused by one of their drivers. This is similar to the insurance provided for taxi drivers by owners of those companies.

Other Insurance for Ridesharing Drivers

Victims’ injuries also may be covered by other insurance sources, depending on the accident’s circumstances. Additional insurance policies may apply, from the liability insurance of the at-fault driver to that of the driver’s contractor.

Sometimes the driver’s personal insurance applies first, with other insurance applied to fill in gaps.

New Rideshare Insurance Law in Texas

Claims against rideshare drivers or firms is an evolving legal area. In Texas, a new rideshare insurance law went into effect on Jan. 1, 2016.

The new Texas law requires that Uber, Lyft and other drivers for Transportation Network Companies (TNC) purchase additional liability insurance to apply when the ride hailing app is on, even if no other persons are in the vehicle.

In Texas, basic minimum liability coverage for all drivers is 30/60/25, which means drivers must have insurance coverage for $30,000 per person injured in a crash, for up to a total of $60,000 per crash, and be covered for $25,000 in property damage per crash.

The new Texas law for Uber, Lyft or other TNC drivers requires them to have higher coverage of 50/100/25 when the hailing app is on and they aren’t providing a ride, and $1 million in coverage when they are providing a ride.

The extra coverage now required for rideshare drivers is:
  • $50,000 for each injured person in a crash
  • Coverage for injured persons for up to $100,000 per crash
  • Property damage coverage for up to $25,000 per crash

No insurance company is required to offer such insurance for TNC drivers, but all TNC drivers are required to find and purchase it. Texas has over 100 auto insurance providers and many do offer it.

More Texas Uber Insurance Changes

Still more Uber insurance changes in Texas include the fact that, as of April 1, 2016, San Francisco-based Uber Technologies Inc. began providing insurance coverage for its thousands of Texas drivers through Progressive Insurance. This constituted a marked change for the company, which till then had used James River Insurance Co. as its sole provider.

The change coincided with Progressive offering TNC insurance for drivers who use their personal vehicles to carry passengers for Uber, Lyft or other ridesharing services. Other insurers also have begun to offer TNC coverage for ride-hailing drivers to fill voids for those whose personal insurance doesn’t cover crashes occurring while they carry passengers for pay.

Uber’s insurance still covers each ride with $1 million of liability coverage per accident and $1 million of injury coverage for uninsured or underinsured persons, along with other coverage.

Other Uber Changes

Other Uber changes include the fact that, on June 29, 2016, the company announced that it will use smartphone sensors to keep track of its drivers’ performance and to discourage sudden braking or speeding, as well as drivers holding their phones while driving.

A test of such new software involves about half of Uber drivers in several cities. Uber’s software will send daily summaries to every driver, including a tally of the times he or she hit brakes or speeded up too suddenly. Trucking companies and other commercial fleet operators already collect comparable information.

After two months of a trial run, Uber is expected to decide if it will expand the program to include all of its drivers.

Insurance for Amazon Drivers

Insurance also is required for Amazon Prime delivery drivers employed by companies affiliated with Amazon. On a national basis, such requirements are much the same as at many companies, with $1 million in commercial general liability.

However, insurance may be different for individual drivers who deliver for Seattle-based Amazon but are not employed by Amazon or a delivery company.

Amazon launched an individual driver service in 2015. Its Amazon Flex drivers are contract drivers whose job is to deliver items speedily to customers who use Amazon’s Prime Now mobile app and pay an annual fee.

Houston, Dallas, San Antonio and Austin all now offer Amazon Flex deliveries. In Texas, some such drivers also deliver amazon.com packages.

As contract drivers, these individual drivers must pay for their own gasoline and personal auto insurance. Personal insurance costs less than commercial insurance — and tends to provide less coverage.

But Amazon also is offering insurance coverage for such drivers while they are driving on Amazon business. This Amazon insurance provides $1 million in commercial auto liability coverage per accident and $1 million in uninsured/underinsured coverage per accident.

If you are injured in an accident involving an individual driver for Amazon, Uber or another commercial service, notify Jim Adler & Associates to get a free legal review of your options for claiming financial compensation.

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