There’s a new fad for 20 somethings nationwide. Why call a taxicab home that probably smells weird when you can call UberX. After all, it’s cheaper, there’s an app for it, and usually it’s one of your friends that are doing it. If you haven’t heard of UBER or Sidecar or Lyft they are the new “ridesharing” companies that are all the rage. Basically, anyone can sign up to be a taxi driver in their own vehicle, a few background checks, you’re given a code and POOF, you can get paid to take people from point A to point B. In theory, it sounds really great, but think twice before you sign your life away.
Uber does not consider itself to be a taxi service. They believe they are simply a place for you to find a driver. They consider each individual driver to be their own independent contractor and though they will get a cut of your profit, they are not your employer. So insurance wise, what’s this mean for you? Uber does provide some coverage, but it is mainly geared towards when you have passengers in your car. When you accept a trip till you drop your passengers off you have a $1,000,000 in liability coverage per incident. Also, in December of 2013 they finally added $1,000,000 in uninsured/underinsured motorist bodily injury coverage, which would cover you in the event that someone with no insurance or not enough insurance hit you during the time you accept a job till you dropped your passengers off. If you’re looking to fix your car after an accident, they will provide $50,000 in coverage for comp and collision, but only if you currently have it on your personal policy and your personal policy must pay out first. But what about when you don’t have passengers? In March 2014, Uber added bodily injury and property damage coverage for when you are logged in and between trips, but much like the comp and collision coverage, your personal policy must pay out first and the coverages is very minimal.
In life, I have learned if it sounds like an awesome deal, then there’s usually a catch and this is no different. To get a majority of the coverages that Uber provides, your personal auto policy must pay out first. So what happens when your personal policy refuses to pay? Usually, when I’m quoting a personal auto policy, there is always a question that guarantees that the insured is not using their vehicle to transport people for pay. It is a very gray line when it comes to Uber because they don’t view you as an employee, but you’re actually doing business related work in your personal car which should fall to a commercial auto policy. It is possible with some companies to add in coverage for performing business on your personal auto policy, but it depends on each company and their guidelines. If you have questions about your coverage regarding this, ask your agent, ECI is always here.