This week’s question comes from Janice R. in the Marina:
Q: “I use Uber, Lyft and Sidecar. I am confused by the insurance issue. Whose insurance protects me if I am in a collision while I am a passenger? I heard of a girl who was in an accident in one of these services and the driver told her to say that she was his friend and not say that she was a paying passenger.”
A: Janice, this is a complicated issue insofar as your question does not indicate who was at fault. So I have to answer it several different ways. First, these companies, such as Lyft, Uber and Sidecar, have been named transportation network companies. So, in the first instance, assuming that the TNC driver is at fault, then the driver and the TNC would be responsible for your injuries to the extent that they are responsible for the collision. By that I mean that if the TNC driver is 75 percent responsible and the other driver is 25 percent responsible, then each would pay his or her share of the damages. This is referred to as comparative fault.
Unlike some other states that are contributory-fault states, where you can’t recover if you are more than 50 percent at fault, California is a pure comparative-fault state, meaning that everyone is held responsible for his or her percentage of the damages caused by the collision.
In a case where you are a passenger (assuming that you have your seat belt on), except in extraordinary circumstances where you interfere with the driver, you generally have no fault and the fault would be divided between the TNC driver and the other motorist.
The California Public Utilities Commission has issued regulations requiring TNCs to carry $1 million in commercial insurance for when the TNC driver is at fault and a passenger is injured. An issue left to be determined before the CPUC is whether TNC drivers’ insurance is what is called primary, meaning that their insurance company is the first policy to be looked to for compensation. TNCs argue that the driver’s insurance should be primary. This cuts the TNC’s insurance premiums, as most collisions will be minor and presumably resolved within the TNC driver’s policy limits. Additionally, those premiums will be lower because the costs of defending against a legal claim are born by the primary insurance carrier. The Personal Insurance Federation has indicated that personal auto policies of TNC drivers will not cover any loss involving TNC drivers who are engaged in TNC services because they are involved in carrying on a business enterprise that is an exclusion from coverage under their private policy. That may be why you heard about a driver telling his passenger to say she was a friend.
The California insurance commissioner and others interested in the issue have urged the CPUC to make the TNC’s insurance primary. That’s the position I support.
When the other driver is at fault, his or her insurance comes into play and covers the loss compensating you for your injuries and damages. If the other driver has no insurance or inadequate insurance and is driving with Lyft or Uber, then you may covered by his or her commercial uninsured or underinsured motorist coverage. A check of Sidecar’s insurance statement on its website does not identify this kind of coverage. So you may be afforded more protection by Uber or Lyft in this eventuality.
The insurance commissioner has urged the CPUC to require TNCs to carry $1 million in uninsured or underinsured motorist coverage. I hope that if the TNCs do not provide this coverage for the benefit of its drivers and passengers voluntarily, then the CPUC orders them to do so.
This not only protects the driver and passenger, it protects us taxpayers who will foot the bill for the injuries caused by those injured by uninsured or underinsured motorists.