The world of technology is again butting heads with legislators all over the country. New app ride-sharing services such as Uber and Lyft have been mired in litigation since their inception.
Recently, insurance coverage has been one of the key points of contention between the technology companies, insurance companies and legislators.
At issue is whose insurance policy applies when an Uber or Lyft driver gets into an accident. Currently, if a driver is involved in an accident and a passenger is in the car, the insurance policies provided by Uber and Lyft will apply.
If the driver is involved in an accident and there is no passenger in the car and the app is not on, then the personal insurance policy will apply.
BUT if the driver is involved in an accident, the app is on, and there is no passenger in the car, neither policy will apply. Uber and Lyft insurance policieis only apply when passengers are in the vehicle. And most personal insurance policies would argue that the app an activated app means the driver was engaged in commercial activity which is not covered by personal insurance policies.
The time period during which neither the Uber/Lyft insurance policies nor the personal insurance policies cover drivers is being called gap-coverage.
California is the first state to regulate gap-coverage with a new law.
Uber & Lyft Craft Proposed Legislation
In the face of rampant opposition, Uber and Lyft have been quietly cobbling together proposed legislation that provides for insurance coverage that addresses gap-coverage issues.
Backed by several large insurance companies and insurance trade groups, the proposed legislation seeks to mirror a new California law that will go into effect in July 2015.
The new law in California will require insurance companies to develop new insurance coverage policies specifically targeting ride-service providers such as those who work for Uber and Lyft.
These so-called “hybrid personal-commercial” auto insurance policies will allow drivers to have coverage during these time periods that drivers are driving with the app on but are not carrying passengers.
The law, AB2293, sets out minimum insurance coverage rates. At Mike Lewis Attorneys, we are excited that the residents of our state have increasing transportation options.
At the same time, we believe that legislators, insurance companies and technology companies have an obligation to work together to produce the kinds of policies that keep everyone safe.
If you or someone you love has been involved in an auto accident involving a Lyft or Uber driver in the Winston-Salem area, please contact Mike Lewis Attorneys for a free consultation.