Uber Accidents and No-Fault Insurance: Know Your Options

Not a taxi driver, but not your friend, Uber drivers can raise a lot of questions when they are involved in car accidents on the job. Will you be covered? Or will you fall through a gap in the new ride-sharing industry? Know your options for no-fault insurance benefits after an Uber accident, so you don't get caught without coverage.

Mobile ride-sharing apps like Uber and Lyft connect would-be passengers with pre-screened drivers at a low cost. That cost savings comes from the fact that ride-sharing drivers are not professionally licensed. Unlike taxi drivers, they aren't required to have a commercial driver's license or taxi certification to offer rides online. But how does that play out when an accident happens? Where can you turn for no-fault insurance benefits after an Uber accident?

Your No-Fault Auto Insurance Travels With You

Many Uber passengers are experienced motorists themselves. They may have chosen to take a ride to avoid expensive parking fees, get around an unfamiliar city, or avoid drinking and driving. Occasional Uber riders who have their own vehicles and their own no-fault auto insurance can rest assured. Their insurance will travel with them.

No matter who is behind the wheel, each person in a Michigan auto accident turns to his or her own no-fault auto insurance first. Policies are written in connection with a particular vehicle, but they are not limited to accidents involving that vehicle. A no-fault policy holder as well as his or her spouse and resident relatives (including children) can file claims for benefits with that insurance company, even when riding with someone else in his or her vehicle.

Uber Drivers' Insurance for Full-Time Passengers

Other Michigan residents live car-free, using public transportation, taxis, and ride-sharing to get where they need to go. Passengers without access to a resident relative's auto insurance policy face unique challenges after an auto accident. They often need to turn to the insurance of the owner or driver of the vehicles involved in the crash. Professional drivers who operate taxis and buses are usually covered personally and professionally. But until recently, Uber and Lyft drivers weren't required to carry any special insurance. That created a problem when a for-hire passenger was injured in an Uber accident.

A standard no-fault auto insurance policy is designed to cover everyday commuting, traveling, and other personal use. But they usually don't cover commercial uses of the vehicle. So when an Uber driver turns on the app and starts accepting rides, he or she turns off the personal no-fault policy covering the vehicle. To deal with this, Michigan recently began requiring ride-sharing drivers to carry a separate commercial insurance policy to cover auto accidents that happen while they are working for-hire. Passengers can turn to this policy for no-fault benefits and to cover third-party damages in serious injury accidents.

Ride-Sharing Companies Give Extra Levels of Coverage 

The Michigan insurance requirement is new, so it is possible that an inexperienced Uber driver may not be covered. Luckily, there is another option. Uber and Lyft each carry company-wide insurance that fills any gaps left by their drivers. Passengers involved in a serious injury accident can take advantage of this insurance to cover their medical expenses, lost wages, and replacement services under the Michigan No-Fault Act, as well as third-party non-economic damages against at-fault Uber drivers.

An Uber accident doesn't have to become an insurance nightmare. Passengers in ride-sharing collisions have options. At Sachs Waldman, we have experience in negotiating competing interests for insurance benefits after a personal injury accident and third-party negligence lawsuits against at-fault Uber drivers. We can help you get your damages covered. Contact our Detroit personal injury law office at 1-800-638-6722.