Do I Look to My Insurance Company or the Rideshare Company?
Uber, Lyft, and other rideshare companies are now major players in American transportation, with more than one in three Americans using a rideshare app every month. But what happens if you’re injured in a motor vehicle accident while riding in an Uber or Lyft vehicle? What if a rideshare vehicle collides with your car while the rideshare vehicle is carrying a paying passenger or on the way to pick up a fare? Who will pay your medical bills? Who can you look to for recovery from your losses?
The initial determination of who pays your bills will depend on whether your state is a “no-fault” liability state. In a no-fault jurisdiction, you file all claims with your own insurance company, which may in turn file a “subrogation” complaint to recover its costs from the at-fault party’s insurer. In Texas, which is not a no-fault state, an injured party may seek damages directly from the at-fault party’s insurer.
There’s a legal theory, known as respondeat superior, which holds that an employer may be liable for injuries caused by an employee acting in the course of his or her employment. Accordingly, if you’re injured in an accident caused by a rideshare operator, your first inclination might be to pursue recovery from the rideshare company’s insurance provider. However, rideshare operators are generally considered to be “independent contractors” and not technically employees of Uber, Lyft, or any other rideshare company. The doctrine of respondeat superior does not apply to independent contractors.
Most rideshare companies, though, require their drivers to have valid automobile insurance that covers them and the car they drive. In addition, there are minimum personal auto insurance requirements established on a state-by-state basis. Many of the more reputable rideshare companies, including Uber and Lyft, carry their own auto insurance on drivers, which may be available in certain situations:
- If the rideshare app was turned on, but the driver did not have a fare at the time of the crash, Uber and Lyft provide coverage up to $100,000.
- If there was a passenger in the rideshare vehicle at the time of the accident, Uber and Lyft may provide coverage up to $1 million.
- If a rideshare operator is involved in a motor vehicle accident, but the rideshare app was not on at the time of the crash, an injured person may pursue recovery only through the driver’s personal motor vehicle insurance.