Q&A with Timothy Salvatore: Who’s at fault in an Uber accident?

Lately, we at KBG have received some questions on what happens when you decide to drive for a ride-sharing company, such as Uber, and you’re involved in a collision?

Does Uber’s insurance cover collision? What about injuries?

Attorney Timothy Salvatore uses a recent example below to illustrate what you should know if you’re considering becoming a ride-sharing driver.

What are the consequences of an accident when you’re driving for a ride-sharing company, such as Uber or Lyft?

I’m sharing this as an example, because I don’t want this young man’s story to become your story of woe.

A young man thought he would earn a few extra dollars instead of idling away time between his day job. He had a good car. He had a great personality. He knew the area like the back of his hand. It seemed like a logical decision that he signed up to become an Uber driver. He quickly earned good ratings and was making good money on the side.

He dropped off a passenger, remained available on the app and drove off. Moments later, he was hit. As it turned out, the striking vehicle was stolen, and the driver was never identified. The Uber driver was sure he wasn’t at fault for causing the collision.

The Uber driver carried state-minimum auto insurance coverage — as little as possible but still legal. Because his vehicle was financed and he still owed almost the entire purchase price of the car, he carried collision and comprehensive coverage for his own vehicle.

Yet, when the Uber driver’s insurance company found he was driving for Uber at the time of the accident, it denied ALL coverage for the collision.

The Uber driver could not collect any medical coverage under his policy; he had no source of compensation for his own injuries, medical expenses, and lost earnings and no source of compensation for the loss of his vehicle.

At the end of the day, the Uber driver could not work because of his injuries. (Even if he could work, how would he get there without a vehicle?) Without a job, he still owed all of his accident-related medical bills and the remaining loan on the car that he no longer had because it was destroyed in the collision. His personal life quickly spiraled out of control …

The risks that he failed to consider and protect against were his downfall.

The first risk factor he ignored is that far too many people still have no auto insurance or state-minimum auto insurance. State-minimum coverage means that the person who runs into you probably has only $15,000 in coverage to pay compensation to you for any bodily harm that you suffer in the collision, including any lost earnings or medical expenses not paid by your own insurance company, and has only $5,000 in coverage to pay for damage to your vehicle. You can end up trying to “suck blood from a turnip” if your losses are greater than the coverage available, and you haven’t purchased insurance coverage to protect yourself.

(In order to protect yourself in the event that the person who causes you harm doesn’t have insurance coverage or enough insurance coverage to compensate for your losses, you are permitted to buy a substantial amount of coverage on yourself, including extraordinary medical coverage, wage loss coverage, accidental death benefits, uninsured motorist coverage, underinsured motorist coverage, and collision coverage. How much can you purchase? As much as your insurer is willing to sell and as much as you can afford. If you don’t know what these coverages are, do some homework or get some sensible advice.)

The second risk factor that he ignored was the distinction between private vehicles and business vehicles. A vehicle that is insured for business use can be used at any time for business use. A vehicle that is insured for private use cannot be used for more than occasional business use. If you regularly use a vehicle in the scope of your business and that vehicle is insured for only private use, you should expect that your insurance company will deny ANY and ALL coverage to you if you are involved in a collision. Your use of a vehicle in the course of business entails added risk for your insurer. Your insurer has a right to know about that risk before agreeing to insure you and setting your premiums. If you fail to disclose a risk, you run the possibility that your insurer will deny your claims based on an exclusion in its policy that covers the very risk that you failed to inform it about. One huge risk for insurers is coverage for public livery conveyances — the provision of transportation for people and/or goods for hire. If you are going to use your personal vehicle for a business purpose, it is in your best interest to ask your insurer for a business rider to your insurance policy. Such a rider essentially removes the business-use exclusion.

(Depending on your insurer’s policies, even such a business rider might not be sufficient to provide you with coverage for use of your vehicle in a public livery conveyance. It is imperative that you discuss your coverage needs with an insurance agent.)

Third, and lastly for the purpose of this column, is the fact that Uber will provide you with only limited insurance coverage. Uber does carry liability coverage to protect Uber in the event that you cause an accident and failed to carry liability insurance or enough liability insurance to pay for the losses that you cause. Uber does provide substantial uninsured and underinsured motorist coverage, but it only applies while its drivers are carrying passengers. The rest of the time, you’re on your own to provide yourself with the coverage that you need to protect yourself; you cannot expect Uber to provide you with the insurance coverage you need to protect yourself.

That’s why it is essential to talk with a knowledgeable, independent insurance agent to make sure you get the coverage you need for your specific circumstances, before an accident occurs.

My hope is that by sharing this tale, and dispensing a dose of free legal advice, someone else may avoid a similar tragedy.

For a free consultation with Timothy Salvatore or another experienced personal injury attorney at KBG, contact us. We’ll fight for the Results You Deserve®.