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Summary:

Uber’s insurance policy has gotten a makeover, designed to erase ambiguity for how drivers are covered while on the job.

Some Uber drivers will now have a clearer picture of how they’re expected to operate on the road, as the startup announced Friday that it has eliminated ambiguity within its insurance policies to help drivers stay covered while on the job. The changes are a result of Uber’s confrontation of serious problems with its insurance policy related to its UberX rideshare drivers, which had relied on personal auto insurance to kick in at certain times. Prior to Uber’s announcement, competitor Lyft said it would change its policy as well.

“Though most personal insurance policies pretty clearly cover a time when a driver is not providing commercial service, there are a few policies, as well as a few states, where there is some ambiguity as to whether that driver can be covered by their personal insurance,” Travis Kalanick, Uber CEO, said on a conference call. “We wanted to make sure that ambiguity goes away.”

Before today, UberX drivers were only insured by the company when transporting or going to pick up a passenger. At other times, the driver was expected to rely on personal auto insurance — even when driving around while waiting for a fare. This ambiguity left a major hole in liability when an UberX driver struck and killed a girl in San Francisco on New Year’s Eve — for which Uber did not claim responsibility. The former policy also left a few dangerous loopholes for drivers, who faced serious repercussions for not carrying a full commercial insurance policy.

Uber Insurance

The new insurance policy introduces “contingent liability coverage” for those waiting between fares, which Uber says will only kick in if the driver’s personal auto insurance refuses to pay damages in an accident. This contingent liability coverage will be available to any UberX driver who has the Uber app on, but full commercial coverage only kicks in when a driver accepts a trip.

The insurance that activates once a driver engages with a fare also has some new features — particularly “contingent and comprehensive coverage,” which covers damage done to a car on an Uber trip regardless of how the personal insurance pays out. This policy replaces the reimbursement coverage system previously in place, which paid out only after personal insurance assessed the claims.

“We went across the country and looked at all the states and what their requirements are for personal insurance,” Kalanick explained. “We found the state with the highest coverage and applied it to all of the services we’re offering across the country.”

The announcement comes after competitor Lyft announced its own amendment to insurance policies on Thursday night. According to Lyft’s statement from last night (via Recode), “This new protection will provide backstop coverage to drivers when they are in match mode and are not providing rides.” But further details of Lyft’s new system have yet to emerge, particularly about the specifics of how much drivers are covered. I’ve reached out to Lyft for that information, and will update this story once I get further explanation.

This article was updated Friday with details from Uber’s conference call.

  1. This is still GARBAGE insurance coverage! UberX & Lyft STILL STATING that any claims involving an UberX/Lyft drivers to be FIRST filed with the drivers’ insurance. It doesn’t matter if the UberX/Lyft driver is between rides, engaged in a ride…the drivers’ personal car insurance is still the PRIMARY policy, UberX/Lyft’s insurance policies are STILL EXCESS LIABILITY ONLY and SECONDARY to the drivers’ PERSONAL CAR INSURANCE policies. The FACT is that personal car insurance EXCLUDES livery or vehicle for hire activities!

    The ONLY way out of this ride-sharing insurance charade is either to make UberX’s policies the PRIMARY, or require UberX drivers to get commercial livery insurance! STOP PLAYING AROUND THE BUSHES, TRAVIS KALANICK!! PEOPLE’S LIVELIHOOD AND SAFETY IS AT STAKE!!
    Please follow me on Twitter @chi1cabby for this #UberFraud!

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  2. SCABS, the more you learn about Uber, the more you learn about, why they are so cheap, if anything happens to you in a Uber car you are on your own butt naked to the wind, like a rent-a-car without insurance.

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  3. Good structured policy, enables the drivers to overcome contigent liability.

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  4. Justin Effing La Plante Monday, April 14, 2014

    If their insurance has changed they why are their TOS pages still written so liability STILL gets dumped on the driver and the riders in the event of an accident?

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