bad effects of drugs

Our Blog

Ride-Share Services: Are you covered?

Ride-share services like Lyft and Uber are becoming very popular alternatives for local transportation. How risky is it to use these services? Many questions are being raised about insurance, liability and ride-share services.

How ride-share works

Ride-share apps and services look to connect private drivers with cars with passengers who need rides in a shared locale. Most of the services screen their drivers, run criminal background checks, maintain records and photos of their drivers and require clients to use credit cards. However, there are plenty of casual and informal carpool services that are less rigorous about how they screen or manage their network.

Ride-sharing is usually about 30% cheaper than hiring a taxi or limousine. The services charge on a suggested donation basis to avoid being considered a taxi. This poses a challenge to regulators and lawmakers and raises concerns about safety and regulation. As the industry grows, legislators are scrambling to catch up.

What about insurance and ride-share?

Since the drivers and cars in ride-share programs are private this sets up some murky areas with regard to insurance. What happens if you are in accident in a ride-share vehicle?

Ride-share companies say the driver’s own personal insurance is the coverage of first-resort. However, the National Insurance Association points out that personal policies “forbid people from turning their cars into commercial taxis.”

Most programs claim to maintain extra coverage, but it is important to note that unless an on-the-record ride has been activated on a ride-share app, a passenger is not considered a customer and a driver is not a partner of a ride-share service. In this case a service could reasonably claim not to have any liability in case of an accident.

In one case, a drunk customer was put in a supposed ride-share car and taken by the driver to a seedy hotel instead of the requested destination. Aside from the personal safety risk, in this case, the ride-share app had not been activated, meaning that if there had been an accident the passenger’s insurance options would be very limited.

The National Insurance Association is calling for ride-share apps to get serious about coverage and there are several bills and proposed regulations in various states, requiring greater scrutiny and mandating increased coverage.

So, rider and driver beware. If you’d like more information about ride-share or carpool and your car insurance policy, give us a call.


Show Comments (0)

This is a unique website which will require a more modern browser to work! Please upgrade today!