It’s no secret that today’s modern taxi ride involves a rider pulling out their smartphone and logging into a mobile app to request a ride. So how does it work when it comes to insurance? Maybe you are a frequent rider of one of these services, or maybe you are thinking about making some extra cash and driving for one of these app-based businesses. Whether you are the passenger or the driver in this scenario, it’s important for you to know and understand how it works.
AS A RIDER:
Most app-based delivery and livery services have their own insurance in place for the rider should their driver get involved in an accident while they are taking an active ride. For the passenger the coverage is pretty simple and straightforward, and the limits of coverage provided by these companies are often greater than the limits of coverage a typical person purchases on their own policy. For example, according to Lyft.com, their insurance provides liability coverage with a limit of $1,000,000 per accident. As a rider, there are very few scenarios I can even imagine where you could be held liable for an accident, but if that were to occur you would have this coverage at your disposal. With regards to Uninsured Motorist coverage, this is pretty important for you to understand because this is coverage that could directly affect you and how you injuries are covered. Uninsured motorist coverage is triggered when an accident occurs that is not your drivers fault, but the at fault driver either A: doesn’t have insurance, B; has inadequate insurance, or C: fled the accident scene entirely and they cannot locate them to determine liability. Each state has different laws governing rideshare services, but in the State of Florida Lyfts policy provides coverage with a limit of $250,000 per accident; other states may have a different level of Uninsured Motorist coverage provided by Lyft, so do not assume this is the same if you are in another state. $250,000 can go pretty quickly when medical bills start piling up, especially if there were multiple riders who are injured (remember, that $250,000 is expected to provide coverage for all injured riders, not each one individually). If your personal auto insurance policy also provides uninsured motorist coverage, you may be entitled to additional coverage within your own personal policy (In some cases your uninsured motorist coverage can extend to other vehicles you are a passenger in).
AS A DRIVER:
As a driver, things get a bit trickier. The insurance policy provided by Lyft can respond in different ways, with different levels and forms of coverage, depending on when the accident occurred in relation to when and how the driver is using the Lyft app. Coverage responds differently based on which “Phase” of the ride the driver is involved in at the time of the accident.
PHASE 1 : DRIVER MODE OFF
As a driver, if you have not yet turned Lyft’s DRIVING MODE feature to the ON position, the coverage provided by Lyft would not apply at all. Your personal insurance policy would be the one required to respond in the event you are in an accident.
PHASE 2: DRIVER MODE ON, NO RIDE ACCEPTED YET
Once you have turned on Lyft’s DRIVER MODE feature, you enter Phase 2. If you are involved in an accident as the driver during Phase 2, Lyft provides coverage they label as “Contingent Liability”. Their “Contingent Liability” has a Liability Limit of coverage of $50,000 per person, and up to $100,000 per accident for bodily injury, and a $25,000 maximum limit for property damage. They provide NO Uninsured Motorist Coverage nor Comprehensive or Collision coverage during this Phase.
PHASE 3: DRIVER MODE ON, RIDE HAS BEEN ACCEPTED
Once you have accepted a ride, you automatically and instantly enter Phase 3. During this phase, the coverage provided by Lyft is at its best. They provide liability coverage of up to $1,000,000 per accident (this coverage can be applied to Bodily Injury claims or Property Damage claims). They also provide Uninsured Motorist Coverage of up to $250,000 per accident (only in Florida), and comprehensive and collision coverage for the drivers’ vehicle as long as the driver has purchased similar coverage on their own personal policy. Comprehensive and Collision coverage is subject to a $2,500 deductible. Once you drop off your rider and complete the ride within the app, you will automatically be reverted back to Phase 2 if your DRIVER MODE is left ON, or Phase 1 if the DRIVER MODE is switched to OFF.
As you can see, this mechanism allows for an awful lot of murky waters when it comes to rideshare drivers and how their personal insurance correlates with the companies’ insurance coverage. To make sure you and your assets are adequately protected, call us and discuss your current auto policy today to ensure you have the coverage you need. You can log onto evolveins.com and request a quote, or call our office at 941-244-2760 and speak with an experienced agent directly.
Please be aware that the information provided above is to be used as a guide. Insurance policy definitions and coverage responses can change or alter at any moment. If you have questions about your insurance coverage, consult your policy directly or contact your agent.