Does Uber or Lyft Cover My Michigan Car Accident Expenses? - Lee Steinberg Law Firm

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Does Uber or Lyft Cover My Michigan Car Accident Expenses?

Rideshare programs like Uber and Lyft are gaining in popularity. From the convenience of your own cell phone, you can now order a ride to basically anywhere by pressing a few buttons. But what happens if you are involved in a Michigan car accident while using Uber or Lyft? Who pays the medical bills and other no-fault benefits? What about pain and suffering?

Michigan Lawmakers Take Aim at Ridesharing Services (Uber & Lyft)

Late last year, Governor Rick Snyder signed a series of bills regulating “transportation network companies”, taxicabs, and certain limousine services. The laws, which take effect on March 21, 2017, finally provides some legal framework for transportation network companies like Uber and Lyft here in Michigan.

Currently, ridesharing or transportation network companies like Uber and Lyft are mostly unregulated in Michigan. Although the companies do provide some basic standards for the hiring of drivers, there are large gaps in liability and no-fault coverage. For example, Uber only provides liability coverage for its drivers when they are using their network system to engage in business to find a potential rider, or when they are engaged in driving a rider.

During the time when the Uber driver is not utilizing the network system, that driver is not protected.

Legal Requirements for Michigan Ridesharing Providers

However, under the new law, Uber drivers and other transportation network drivers – as well as their passengers – are now protected. The basic rules of the new law include:

  • A limo carrier must provide insurance for its driver, including a minimum single limit of $1.0 million for all people injured.
  • A taxicab carrier must provide insurance for its driver, including a minimum single limit of $300,000 for all people injured.
  • A Uber (or Lyft) driver, must maintain primary car insurance on a personal vehicle that recognizes that the Uber driver uses the vehicle for Uber or otherwise uses the vehicle to transport passengers for compensation.

During the time the transportation network company driver is logged on to the network app and is available to receive rides, but is not engaged in a transportation network ride, the driver must maintain at least $50,000 per person, $100,000 per incident in bodily injury coverage, as well as $25,000 for property damage.

During the time the transportation network company driver is engaged in a ride with a passenger, the driver must maintain a minimum combined single limit of $1,000,000 in bodily injury coverage.

In addition, Uber drivers, as well as taxicab and limo drivers must maintain no-fault insurance and property protection insurance as required under the Michigan Insurance Code, more specifically MCL 500.3101.

This means the transportation network company driver must maintain the same no-fault coverage that all other Michigan policyholders are required to maintain. This includes the payment of medical bills, hospital bills, lost wages and other benefits for passengers injured as a result of a car or truck accident while using a Uber or Lyft ride.

Uber & Lyft Drivers Largely Unaware of Coverage Issues

Currently, one of the major problems for Uber and Lyft drivers, and therefore other motorists, is the fact many are driving without valid car insurance coverage and don’t even know it. Most car insurance policies have specific exclusions for insureds or policyholders who use their vehicle for business purposes. This means that although the Uber driver may believe he or she is insured when operating their motor vehicle while driving for Uber, in reality, their coverage will be excluded if involved in an accident because they are using their vehicle for a business purpose.

The new legislation seeks to close this loophole. Now, Uber drivers will be required to take out insurance that specifically covers the time they utilize their vehicle as a Uber driver.

In fact, if the required insurance lapses or does not provide the required coverage, the insurance maintained by the transportation network company must provide the required coverage, beginning with the first $1 of a claim, and the insurer for Uber or Lyft must defend the claim.

This marks a huge change from the current system. Currently, the insurance company for Uber and Lyft will not pay any claims until the coverage for the individual driver has been ruled out. This can be a long and exhaustive process, leaving many injured people in a financial bind. The new law ends this charade and is supposed to provide prompt and efficient payment of claims for car accident victims.

Injured in an Uber or Lyft Car Accident?

If you were a passenger in an Uber or Lyft vehicle that was involved in an accident, contact the Lee Steinberg Law Firm, P.C. at 1-800-533-3733 for a FREE consultation regarding your rights and to learn more about the value of your potential claim.

Our Michigan personal injury lawyers have decades of experience representing the injured people of Michigan. With offices in Detroit, Flint, Saginaw and Southfield, we are equipped to meet with you at a location that is convenient for you.