Insurance Law

Is an Uber ride covered if an accident occurs? Insurance representatives are dubious

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It isn’t just traditional taxi drivers who see a problem with the ride-sharing service offered by Uber.

Linking potential customers, via a smartphone application, with private drivers willing to take them to their destinations may result in a fare lower than what a traditional cab company would charge. But it may also result in a lack of insurance, should an accident occur.

That’s what representatives of insurance trade associations told the Nevada Transportation Authority on Wednesday, saying both customers who use Uber and drivers who pick them up may not realize injuries from any accident likely won’t be covered, the Las Vegas Review-Journal reports.

The problem is, many drivers participating in Uber are insured as private individuals, not under commercial policies, which cost substantially more, explained president Michael Geeser of the Nevada Insurance Council. If an insurer finds out an accident occurred when an Uber passenger was in the car, the insurance policy will probably be revoked, he said.

Meanwhile, although Uber advertises a $1 million insurance policy, it may be an “excess” policy applicable only once the driver’s insurance is exhausted, said Jeannette Belz, a legislative representative of the Property Casualty Insurers Association of America.

If the driver has no applicable insurance, or a policy that excludes coverage for commercial use of the vehicle, it isn’t clear an excess policy would “drop down” to fill the insurance gap, she continued.

“The ride-share companies also use triggers for coverage that may not provide coverage that is as broad as the livery exclusion and could result in costly coverage disputes and delayed compensation to accident victims,” she said. “These issues are a source of confusion for ride-sharing drivers and passengers who either erroneously believe that their personal automobile policy will provide coverage or realize that it does not and are simply hoping for the best.”

Officials in Nevada have been seeking to prevent San Francisco-based Uber from gaining a foothold in their state and have been aggressively citing and even confiscating vehicles from Uber drivers. However, their enforcement efforts were curtailed when a Clark County judge, unlike a couple of judges elsewhere, refused to issue a court order banning the service at the state attorney general’s request, Reuters reported last month.

Earlier Associated Press and Las Vegas Review-Journal articles provide details.

See also:

ABA Journal: “Internet car companies offer convenience, but lawyers see caution signs” “Family sues Uber over death of girl, 6, says smartphone app violates state distracted-driving law”

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