The Limits of Uber’s Personal Injury Coverage

uber personal injury coverageAfter a night on the town, a taxi is no longer your only option to get back home. Uber, and other “ride-sharing” companies, have given the taxi companies a run for their money by offering cheap(er) and easier transportation. The idea is great: link drivers and those in need of a ride via a smartphone app, allow them to communicate with the tap of a finger, and get rid of on-the-spot payment.

Riders are happy because they can get from A to B cheaper and faster.  Drivers are happy because they can earn a living (or extra money) as a cab driver without dealing with the logistics of a cab company which have been historically some of America’s worst run businesses.  Of course, Uber is happy too because they make so much profit by brokering the transaction that their company may be worth as much as $40 billion.

If you have been injured or have lost a loved one as the result of the negligence of an Uber driver, you could not care less about any of this.  You want to know if there will be compensation for the harm that was caused to you.  The issue is who is going to pay for the damage and the suffering that you have endured.  If an Uber driver causes an injury, who will end up paying? The driver? Uber? The injured person?

Why Uber Presents an Issue

When drivers sign up to drive for Uber, they are not being hired as an employee of the company. And when riders catch a ride from an Uber driver, they technically are not getting a ride from Uber.  Their contract is pretty clear, claiming that Uber merely facilitates communication between riders and “third party providers.” And, of course, they waive all liability “arising from or in any way related to” Uber drivers.

So the question is can you sue Uber when one of its drivers injures you in an auto accident.  Can you sue Uber directly when one of its drivers negligently causes harm?   Uber has and will continue to be sued directly. You can make the argument that the drivers are actually de facto employees of Uber.  Will a judge agree?  Under Maryland law and probably every other jurisdiction, this argument has little success.

The good news is that for most people injured as the result of Uber’s negligence — and all Uber passengers — there is a million-dollar car insurance policy that will cover the loss.   Importantly, this policy also has $1 million in uninsured motorist coverage so if you are hurt in an accident by the negligence of someone other than the Uber driver, you can still make a claim on this $1 million policy even if the at-fault driver does not have $1 million in coverage.  This is usually not enough money in a wrongful death case in Maryland but it is still more coverage than is needed in the vast majority of personal injury accident claims.

The Problem of When Uber Insurance Coverage Begins and Ends

Regrettably, it is not that simple.  When does the coverage begin?   If the “ride-sharing partner,” as Uber calls them, is not on a trip with customers or in the process of picking up a passenger, but is driving around with the app on waiting for a fare or driving back from afar, that million policy does not kick in to cover the loss.

But there is a bigger problem.  Passenger insurance companies often will not cover claims arising from commercial activity and they draw the line of what is commercial activity differently than Uber does. So there can be a real gap in insurance coverage between that million dollar policy and the driver’s auto insurance policy.

How This Created a Real Problem

This “insurance gap” was felt in a tragic accident in California that has gotten a lot of attention.  There, an Uber driver (while fumbling with his Uber smartphone app) struck and killed a young pedestrian while he was on the way to pick up a rider.  This is the classic case to show the risks of this gap.  Uber’s “Million Dollar” coverage did not apply since the driver did not have any passengers in the car, nor was he going to pick up a passenger. The family ultimately sued Uber because they had no other path to justice.  But this will be an uphill climb.

Uber’s New Solution to the Problem

Give Uber credit.  This company has its pulse on the popular culture and has been transparent about the problem and the insurance gap.  Uber’s solution is to offer at $50,000/$100,000 insurance policy in these gap cases.  Which means that there is a maximum of $50,000 in insurance coverage per person and $100,000 per collision.

Uber reasons that this is more than other cab companies are doing.  Fair enough.  There is no question that getting injured as the result of a negligent taxi driver is a disaster because their insurance is invariably awful on every level (usually insured by MAIF in Baltimore, which is another disaster of a company).   But that is setting the bar pretty low, right?   I thought Uber wanted to be something different, a company that puts safety and justice first.

Ultimately, Uber will keep getting sued in serious injury and wrongful death cases until it resolves this issue. If this coverage had applied in this case, we would have the same problem because $50,000 will not be enough in a wrongful death case.  Uber will have fewer claims and less bad publicity to worry about because this coverage will solve all the small accident cases. But when someone is really hurt or killed, this policy is virtually worthless. More on Uber accident settlement amounts.

Getting a Lawyer for Your Uber Car Crash Case

Our law firm handles personal injury car accident case in Baltimore City and every single county in Maryland.  If you have a claim against Uber, Lyft, Sidecar, or any other ride-sharing related car accident claim, call Miller & Zois at 800-553-8082 or get a free no-obligation case evaluation online.

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