Uber Drivers and Car Insurance Detailed Explanation
Before you can start using your car for ridesharing platforms such as Uber, you have to understand how their insurance works first. Remember that when using Uber, your personal insurance cover does not apply, as you are now using the car for commercial activities. The insurance will only cover if you buy a commercial policy in combination with what Uber offers.
Uber’s insurance does not cover the driver when the app is closed. During this time, the personal auto policy will apply until you get the app running again.
Even when the app is running, there are still some limitations to when Uber provides cover for liabilities. There are three times when the ridesharing insurance cover is applicable. First, the insurance covers you when your app is open, but you do not have a passenger yet. It can be when you are cruising around town, hoping to get a request from a passenger.
In the second instance is where the insurance applies is when you get matched to a rider and get on the way to pick up the passenger. The third instance is when you get the passenger until the passenger exits the car and ends the ride.
Under all these circumstances, the insurance cover varies a lot. There will be a change in the amount of coverage that Uber offers to the driver and passenger.
The Uber Insurance Protection
As discussed above, the insurance cover varies a lot, depending on what the driver is doing. In the first instance, when you are still waiting for an Uber request, the coverage is relatively low. The Uber liability coverage at this point is up to $100,000 per accident, $50,000 per person in case of bodily injuries, and $25,000 for the property damages in the accident.
Even that being the case, you first file a claim with your personal insurance. If the insurance company denies paying for the damages, it is when you can opt for Uber insurance cover.
In the second circumstance, when a rider requests for a ride, things change fast to give you better coverage. At this point, the Uber coverage goes up to $1 million, which is enough to cover for most eventualities. The best part is that the insurance is also comprehensive, as it will cover for any damages caused by uninsured or underinsured drivers.
The same rules for coverage apply until your passenger exits the vehicle and end the ride. After this, you will be back to the protection under the first circumstance.
When Does Personal Auto Insurance Work?
If you are going to pay for auto insurance, you would want to know if it remains functional or else if there is no need to have it. Well, your personal insurance cover works only if you are driving the vehicle for personal use, and the Uber app is not open.
Legally, the personal insurance covers are not for commercial services. Even if you do Uber part-time, the cover does not apply. All these personal covers will have a clause that excludes the use of the car for commercial activities. The insurer can easily deny paying for damages when it turns out that you were using the vehicle for commercial services. In some cases, the insurer can also cancel your policy for violation of the terms and conditions.
If you want to be fully covered even without the Uber insurance, the driver has to get the commercial car insurance. However, these policies are expensive, with most starting from $5,000 to $8,000 per year. Considering that Uber and other ridesharing platforms can provide a similar cover for only a $1,000 deductible, it is better to opt for their cover.
It does not matter which policy you decide to use. The important thing is to understand where each policy applies. Talking to an auto insurance lawyer should be the best way if you do not understand the legal jargon in the insurance covers. With the advice of your lawyer, you should now opt for the best insurance policy that will cover your activities.