Ride sharing has become one of the most popular forms of transportation in recent years. Different than taxi service, ride sharing is performed by independent contractors that use their vehicles to provide the service. All of the rides are managed through a phone app, making getting a trip much more accessible.
Although the drivers work as independent contractors, the owners of the application manage all of the ride requests, and the monetary transactions. No money is ever exchanged between the driver and the passenger. It is all handled by that app owner.
Ride sharing is a very innovative idea and has become a preferred method of transportation for many people. However, it has also created many interesting questions about a car used for hire. Laws that apply to public transportation and taxi services do not apply to ride sharing vehicles, so making a claim for compensation can become tricky. Call 856-284-6446 to speak with a NJ car accident attorney at Rosengard Law Group.
Independent Contractors Are Covered By Different Insurance Plans
Uber and Lyft are the two most popular forms of ride sharing in the U.S. These companies have a phone app that passengers can download to request rides. This same app, when downloaded by a driver, can be used to find people that need a ride, accept payments for that ride, and process those payments for them to receive the payment for their services.
Under independent contractor laws, Uber and Lyft do not control what the driver does when they are driving their own vehicles. Therefore, any accidents that occur are not the responsibility of the company. Suing Uber or Lyft for an accident is not a likely scenario because the driver is not officially employed by the company.
However, because of the unique situation surrounding ride sharing activities and the company that manages them, both Uber and Lyft have insurance policies that cover their drivers. Making a claim against these policies, however, can be a little tricky.
Understanding Insurance and Ride Share Services
All ride sharing services require that their drivers have insurance coverage on their vehicles. All drivers must provide the ride share company with proof of this coverage. Sadly, most drivers do not have the right insurance on their vehicles when providing rides for hire.
Insurance companies do not provide coverage on passenger vehicles used for work purposes or for ride sharing unless a specific rider is purchased for that purpose. Since most people do not disclose to their insurance provider that they are offering ride sharing services, or are unaware that they need this additional protection, when an accident occurs, there is no coverage in place for the event.
Many insurance companies will even seek legal action against the drivers for fraud when they have an accident in their vehicle that they are using for work or ride sharing for not disclosing this activity to the insurer.
So how does a passenger get coverage for an accident in a ride share vehicle?
The companies that own the ride sharing application have insurance policies in place that cover the actions of the driver under the following conditions:
• The driver has the application on and is actively seeking a ride share fare. Coverage is in place, even if no one is in the vehicle at that time.
• The driver is en route to pick up a matched fare.
• A passenger has been picked up and is physically inside of the vehicle. The passenger is covered the entire time that they are in the vehicle. Once the passenger reaches their destination, the coverage ends.
Under these insurance policies, the injured party must file a claim against the insurance carrier of the driver first. If that claim is denied, which it will be unless the special rider has been purchased, then the injured party can seek compensation from the insurance policy managed by the application company.
If you have a successful claim against the insurance provider used by the app company, you will be entitled to seek all the same types of damages as you would under a regular insurance policy.
If you have been involved in a car accident when you were a passenger in a ride share vehicle, it will be in your best interest to speak with a car accident attorney about your case. The claim for compensation can be a very complicated process because of the multiple parties involved.
Since the insurance coverages for these events involve several entities, the injured party often gets “lost” in the paperwork and does not receive all of the compensation that they are entitled to for their injuries and losses. Having an attorney manage your case will help you avoid these issues.