UberX, Lyft Expand Driver Insurance

Ride-service companies UberX and Lyft have announced they are expanding their insurance to cover drivers who are between passengers but logged onto their apps awaiting a call.

In a blog post this morning Uber said its new policy ...

"... expands the insurance of ridesharing drivers to cover any potential “insurance gap” for accidents that occur while drivers are not providing transportation service for hire but are logged onto the Uber network and available to accept a ride.

Starting today, if a driver’s personal insurance policy is found not to cover an accident during this period, this new policy will provide contingent coverage for a driver’s liability at the highest requirement of any state in the U.S: $50,000/individual/incident for bodily injury, $100,000 total/incident for bodily injury and $25,000/incident for property damage.

Those coverage amounts are much less than the $1 million in liability insurance the company offers -- and is required to by California -- for drivers who are actually on a call.

Lyft also announced a similar expansion of its liability policy to drivers who are between calls. In a statement, the company said:

While we do expect personal carriers to cover the time period prior to carrying a passenger, in order to erase any uncertainty, Lyft will now provide additional protection. This new protection will provide backstop coverage to drivers when they are in match mode and are not providing rides. We will be rolling this out state-by-state in the days to come.

The limitations of UberX and Lyft insurance policies became widely known after a fatal accident involving an UberX driver in San Francisco on New Year's Eve. The driver was between passengers -- logged onto the UberX platform but yet to accept a call. UberX said its $1 million insurance policy did not apply because it only covered drivers who were actually carrying passengers or were on their way to pick them up.

UberX also said the insurance company of that driver, Syed Muzaffar, has "offered up the limits" of his personal policy in connection with the incident. California requires all drivers to carry liability insurance of $15,000 for the injury or death of one person per accident, $30,000 for the injury or death of two or more persons, and $5,000 for any property damage. The liability costs of the accident Muzaffar was involved in could very well be in the millions.

In addition to the expansion of its liability coverage, Uber said it would offer new comprehensive and collision coverage when UberX drivers were on a call. Collision insurance covers damage to a driver's vehicle when the driver is at fault. This new coverage is contingent on drivers having purchased similar coverage on their personal policies, Uber said. The deductible is $1,000 and the maximum payment is $50,000 per vehicle.

Update:

Chris Dolan, the lawyer for the family of Sofia Liu, killed by an UberX driver in San Francisco on New Year’s Eve, is not impressed with Uber's announcement, calling it a "sham PR stunt" in a press release. The Liu family is suing Uber, claiming, among other things, that the app its drivers use to accept calls contributes to distracted driving.

In a press call today, Uber CEO Travis Kalanick said Muzaffar's personal insurance company is paying the claim. But Dolan said Muzaffar's insurance has a $30,000 cap on it, and "the bills are in the hundreds of thousands of dollars." He said the amounts offered by UberX's new insurance, up to $100,000 in bodily injury and $25,000 in property damage, "degrades the value of every human life."

The San Francisco Municipal Transportation Agency requires taxis to carry $1 million in liability insurance. The taxi industry has argued that ride-service vehicles are taxis by any other name, and therefore should have to offer similar insurance.