UberCab, now known as Uber, began in 2009 by founders Garrett Camp and Travis Kalanick in San Francisco. Over the years, the company has increasingly gained popularity with Millennials as a form of transportation and a convenient way to avoid DUIs. There are over three million Uber drivers in more than 600 cities.
The coverage issue
When Uber began, its drivers were considered contract workers or independent contractors – not company employees. Employee status greatly impacts liability coverages. In the past Uber attempted to argue this grey area to its benefit by denying coverages that should be afforded to its drivers and their passengers. The even bigger problem arose when the Uber driver’s personal insurance company also denied coverage because the driver was undertaking a “commercial activity” at the time of the crash. Commercial activity is a listed exclusion in most personal automobile insurance policies. The coverage denial from Uber coupled with the denial from the driver’s personal insurance policy left injured people in situations where no insurance coverage was available.
The fix: House Bill 237
In 2016, Ohio passed House Bill 237 (HB237), which requires Uber to pay liability coverage unless the driver’s policy provides coverage for ridesharing provisions. Personal auto policies rarely include ridesharing provisions so Uber coverage is almost always available.
When is Uber liability coverage triggered?
Today, Uber provides liability coverage to all drivers the minute they accept a ride with a passenger. Uber provides three types of coverages to the driver and passengers: two types of liability coverage and underinsured / uninsured motorist coverage.
1) What is Third-Party Liability Coverage?
This coverage provides coverage for bodily injuries caused by the driver to others, including passengers in the Uber, pedestrians and other motorists outside of the Uber.
2) How much liability coverage is provided by Uber? Uber provides $1 million in liability coverage for its drivers.
3) What is Underinsured/Uninsured Coverage?
Underinsured coverage provides additional coverage for damages when an at-fault driver does not have enough insurance. For example: an at-fault driver runs into your Uber. The at-fault driver only has insurance limits of $25,000 which is the state minimum in Ohio. Your injuries are greater than $25,000. Uber carries a $250,000 underinsured policy. As a result, you have up to $250,000 available to collect for your injuries. You first must collect the $25,000 limit from the at-fault driver’s insurance company and get permission from Uber before you collect the first $25,000. You then have up to $225,000 available the Uber policy.
Uninsured coverage is available if the at-fault driver has no insurance at all. The Uber driver and Uber passenger will be able to recover under this coverage up to the $250,000 policy limit.
What is the current Uber insurance policy limit for underinsured and uninsured coverage?
The current Uber limits provided for both the UM/UIM are $250,000 per accident.
Liability coverage required for the Uber driver who has yet to accept a ride
All Uber drivers are required to have personal automobile insurance coverage, including liability coverage of $50,000 per person/$100,000 per accident and $25,000 for property damage. This is the bare minimum coverage required by Uber for all drivers to cover them during their “off” times and waiting for a rider.
For more information, contact the attorneys at Rittgers Rittgers & Nakajima. Our lawyers have a record of success in serious injury and death cases. In the past two years alone, we have numerous multi-million dollar collections for our clients, including $5,000,000; $2,800,000; $2,750,000; $2,100,000; $1,100,000; $1,000,000 – many of which were for the maximum available insurance policy limits.