Uber Problems: Are Passengers Insured For Car Accidents?

This week, The San Francisco Chronicle, Forbes, and The Washington Post all reported on the confusion over insurance coverage over accidents involving popular app-based services such as UberX, Lyft and Sidecar. Insurance coverage has been a major issue for the ride sharing companies following a high profile accident in San Francisco where a small child was fatally injured by an Uber driver. Similarly this month, a Lyft passenger was fatally injured outside of Sacramento, CA.

Questions have arisen as to what extent a car accident is covered by the driver's policy v. the ride-sharing service? Does a driver or ride-sharing service cover accidents when en route to a pickup? Will a passenger be covered for accidents where the ride-sharing driver is at fault?

According to news reports, Uber has a $1 Million dollar policy, but an accident may not be covered until the driver is matched with a paying customer. This reported policy has drawn criticism following the San Francisco fatality where the Uber driver was not transporting a customer at the time of the collision.

In a traditional auto-accident, the at fault driver will be responsible for damages through his or her insurance policy. If he or she does not have coverage or has inadequate coverage, the party not at fault's uninsured (UM) or underinsured (UIM) coverage usually will apply. Ensuring potential victims of auto accidents are covered when using app-based ride sharing programs is vital to the safety of the urban areas where these services operate.