As of July 15, 2015, Uber and Lyft have been required to carry $1,000,000 in underinsured/uninsured motorist coverage. (Courtesy photo)

As of July 15, 2015, Uber and Lyft have been required to carry $1,000,000 in underinsured/uninsured motorist coverage. (Courtesy photo)

Uber, Lyft held to higher insurance standard

This week’s question comes from Phillip B. in Mountain View, who asks:

Q: “My girlfriend was riding in an Uber vehicle in Southern California when the car was hit by a truck that was changing lanes. The Uber driver did nothing to cause the accident. The truck never stopped, and no one got a license plate number or other identifying information. She was hurt in the collision, has racked up medical bills and missed time from work. She is going to have a tough recovery time. At the time of the collision, she was riding with a friend who had the Uber account. Can she seek compensation for what happened to her and, if so, from whom?”

A: Phillip, I hope your girlfriend makes a speedy recovery. The answer to the question you ask involves an area of law regarding uninsured/underinsured motorist coverage, which is somewhat complex.

Based on your description, the responsible party appears to be the truck driver. In the situation you presented, the responsible party has left the scene so, without some way to identify who they were and/or what company they work for, there is no way to hold them accountable. Had someone been able to identify the company that owned the truck, they could have been held responsible for the acts of their employee under the “master servant” doctrine, referred to in Latin (many principles in law have Latin names) as “respondeat superior.”

When the responsible party cannot be identified or they have no insurance, then, depending on the insurance coverage purchased by the party not at fault, an injured party can turn to their uninsured motorist coverage to compensate them for the full extent of their injuries to the same degree that they would have been able to recover from the responsible party if they had insurance. The uninsured motorist insurer has the right to raise any and all defenses that the responsible party would have. It is somewhat unusual, as the insurance company has both the responsibility to fairly compensate its customer while simultaneously advocating to pay them the lowest amount they can. If the insured and insurance company cannot come to an agreement for fair compensation, the parties, under the terms of their contract, have the dispute handled through arbitration rather than through a public jury trial.

Underinsured motorist coverage acts, in many respects, like uninsured motorist coverage — the difference is underinsured motorist coverage comes into play when the responsible party is identifiable and has insurance but the insurance is insufficient to compensate the injured party for the full extent of their losses.

If, for example, the responsible party had $15,000 in insurance, the injuries were in excess of $150,000 and the injured party had a $100,000 uninsured/underinsured motorist coverage, then the injured party can seek up to $75,000 from their own carrier. If the math seems a bit off — you’re wondering why the injured party can’t seek up to $100,000 from their $100,000 policy — it’s because insurance companies exert significant financial influence in politics with massive political contributions that have legislators scared of them.

In the past, the Consumer Attorneys of California (for which I was president in 2010) has introduced legislation to have the law changed to match that which exists in most other states where the insurance limits of both policies could be added together to provide up to $115,000 in coverage. Each time trial lawyers have tried to make this change to benefit insurance policy holders, the insurance companies have spent huge sums of money and have flooded the state capital with lobbyists to kill the pro-consumer legislation.

As a result of the legislation (AB 2293) — introduced by Assemblymember Susan Bonilla, and which the Consumer Attorneys and I participated in through its drafting and signature by the governor — Uber and Lyft have been required to carry $1 million in underinsured/uninsured motorist coverage, as of July 15, 2015. Therefore, your girlfriend should be able to recover for her injuries under this policy. She should contact Uber, who will put her in touch with their insurer, James River. She should also reach out to a trial lawyer who handles personal injury claims to help her navigate these rules.

It’s important for anyone who is involved with a hit-and-run driver to immediately call the police and make contact with their insurance company promptly. Failure to do so may violate the terms of the insurance policy, resulting in the inability to recover under the policy.

Christopher B. Dolan is owner of the Dolan Law Firm. Email questions to help@dolanlawfirm.com.

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