Rideshare apps have become essential to traveling, but are passengers taking the right steps to ensure they are protected?

It seems that everyone is using rideshare services like the Uber app and Lyft these days. They are generally much less expensive than traditional taxi services and are often much quicker. This is due to the state of the art GPS systems they utilize to match you to the closest driver to your location. 

In 2018 Uber announced they had 75 million riders and 3 million drivers worldwide; over 90,000 people say driving for Uber is their full-time job. With 900,000 drivers in the US alone, Uber is the fastest growing rideshare company across the globe. Over 90,000 people report their full-time job to be driving for Uber and many users starting to use Uber exclusively in lieu of car ownership.

The convenience these services offer is a game-changer for the travel industry, but are our insurance policies keeping up? 

Although both Uber and Lyft consider them to be independent contractors, both rideshare companies provide insurance coverage for their drivers that complement the driver’s chosen personal insurance policy. When the rideshare app is turned on and active this coverage is available. When the driver has the app turned off or is otherwise offline they are covered by their personal car insurance. 

Depending on the type of coverage your driver carries under their personal auto insurance policy, they may experience some insurance issues driving for Uber. Many insurance providers do not offer rideshare insurance. In fact, most policies have an explicit “ride for hire” exclusion. This means that without a specific rideshare gap coverage many rideshare drivers are underinsured or not insured.

What kind of coverage do Uber and Lyft provide their drivers?

Before a driver accepts a ride, both Uber and Lyft insurance policies have a $50,000 maximum coverage limit per person, a $100,000 maximum limit per accident, and a $25,000 maximum limit for property damage. It’s important to note that this coverage only begins once the driver is logged into the app and ready to accept a ride request.

Once the driver has accepted your ride request, Uber and Lyft maintain insurance to cover up to $1,000,000 in third-party liability insurance, UM/UIM (Uninsured/Underinsured motorists) coverage, and contingent collision and comprehensive coverage. For Uber’s insurance policy, your driver’s deductible in the event of a covered accident will be $1,000. However, Lyft driver insurance requires a $2,500 deductible. 

So I’m covered in the event of an accident… right?

When your diver is logged into the app you should be covered in the event of an accident. Issues tend to arise in situations where either the driver or passenger is not following specific protocols set forth by both rideshare companies. Say an Uber driver pulls over for your street hail instead of a taxi, the driver is not following the correct protocol and hasn’t “accepted a ride request”.

Rideshare accident - Uber Accident - Lyft Accident

Ridesharing accidents can be questionable.

In this scenario, the driver would only be covered under the first tier of Uber’s insurance policy – if they were even logged in. During the trip, the driver would be unavailable to drive for Uber, so they would be logged off of the app. This means the only coverage the driver has is their personal car insurance policy. Unless they have specific gap coverage or a commercial license and commercial insurance they may not be covered at all in the event of an accident. 

What you can do to ensure your safety while riding with Uber.

UberBlack is Uber’s luxury car service, and they carry different requirements than your standard UberX. Uber requires these drivers to carry commercial licenses and insurance policies, typically a minimum of $1.5 million in coverage. These automobiles must be no more than 5 years old and are generally much more expensive than other cars you would see driving for Uber. Between the insurance and licensing requirements, and the driver’s natural inclination to protect their investment – a passenger is generally much less likely to experience an accident during an UberBlack ride.


Ultimately, in the event of an accident, while you are a passenger in an Uber, and are using the service as intended, you should not look to Uber or Lyft to insure damages as a result of an accident. If you use these services, I suggest a meeting with your insurance broker and discuss the importance of an umbrella insurance policy in addition to car insurance to allow you additional peace of mind knowing you have more than enough coverage in the event of bodily injury and extreme medical bills for underinsured Uber or Lyft drivers. In addition, I suggest monitoring the coverages of all types as Uber and Lyft services evolve over time.


The Law Offices of Sam Maguire, Jr., P.C. are available to assist in any business law or real estate law matters.

The Law Offices of Sam Maguire, Jr., P.C.