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Uber and Lyft Crashes and Insurance Coverage for Third Party Injuries

December 14, 2020

In November 2020, Californians voted on Proposition 22 (“Prop 22”), pursuant to which Californians decided whether to exempt Uber and Lyft drivers from having to classify their drivers as “employees” rather than “independent contractors”. Ultimately, Californians passed Prop 22 and exempted Uber and Lyft from classifying their drivers as employees.

Generally, Prop 22 passing was considered a “major win” for Uber and Lyft. However, many Californians are left wondering whether Prop 22’s classification of Uber and Lyft drivers as independent contracts means Uber and Lyft do not have to carry liability insurance for their drivers. Alternatively, if Uber and Lyft are not required to maintain such coverage, are Uber and Lyft Drivers required to maintain it?

These questions are incredibly important for Los Angeles, Orange County and San Diego drivers who regularly drive on the busy freeways in and around Southern California. Indeed, Southern California drivers are often injured in car, motorcycle, pedestrian and truck crashes involving a Lyft or Uber. Luckily, California already has a law in place requiring Uber and Lyft, or their drivers, to maintain liability insurance.

California’s Public Utilities Code section 5430 et seq. requires “transport network companies” (hereafter “TNC”) or their participating drivers to maintain varying levels of insurance for their drivers. (Pub. Util. Code section 5433) Specifically, the Public Utilities Code defines a TNC as:

An organization, including, but not limited to a limited liability company, sole proprietorship, or any other entity, operating in California that provides prearranged transportation services for compensation using an online-enabled application or platform to connect passengers with drivers.

(Pub. Util. Code section 5431.)

Indeed, Uber and Lyft fall into the category of TNCs and the law requires that Uber and Lyft, or their rideshare drivers, to maintain minimum levels of liability insurance. The minimum level of insurance coverage depends on the phase of the Uber or Lyft driver’s ride-share trip.

The TNC or driver is required to maintain $1,000,000 in liability coverage for “death, personal injury and property damage” at all times when the Uber or Lyft Driver has accepted a ride request (“En Route”) or is actively driving a passenger or passengers (“Uber Trip”). (Pub. Util. Code section 5433(b)(1).) Alternatively, when an Uber or Lyft driver has the application turned on and is waiting for a ride request (“Waiting”), the TNC or driver is required to maintain liability insurance with policy limits up to $50,000 in bodily injury per person and $100,000 per accident. (Pub. Util. Code section 5433(c).)

Indeed, Uber represents that it maintains the required coverage to protect passengers and third parties (https://www.uber.com/us/en/drive/insurance/). Importantly, these coverages only apply for “third-party liability”, which Uber defines as: “Insurance for bodily injury and property damage caused to a third party arising from a covered accident. A third party is someone or something other than [an Uber Driver] or [an Uber Driver’s] vehicle.” (Id.) Put another way, the insurance policy covers Uber passengers or other drivers on the road. However, the policy does not necessarily cover the Uber driver himself. (Id.) Of note, Uber also claims to maintain uninsured and underinsured motorist coverage while Uber Drivers are En Route or during an Uber Trip. However, the level varies by state.

Unfortunately, every day there are hundreds if not thousands of vehicle crashes in Southern California involving Uber and Lyft ride-share vehicles. Worse yet, Uber and Lyft crashes often cause injuries to passengers or other drivers on highways and interstates in Los Angeles, Orange County and San Diego. If you or a loved one has been injured in an Uber or Lyft accident, you may be left wondering where to start. The good news is that Uber and Lyft, or their drivers, likely have an insurance policy to cover your injuries. The bad news is that injured persons often struggle to receive fair and full compensation from insurance carriers. Accordingly, the right attorney may be able to help you receive fair and full compensation for your Uber or Lyft injury.

The attorneys at MKP Law Group, LLP have years of experience representing Southern Californians who have been injured in Uber and Lyft crashes. Contact MKP Law Group, LLP at (310) 285-5353 for your free consultation today.