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Are Uber Riders in SC Properly Insured?
Do you Uber? Did you know your driver is technically running a for-hire livery business out of his car and is not considered a traditional employee of Uber? Unfortunately, as a livery business, your driver’s personal auto policy becomes unreliable as soon as he clocks in on the app. We already know that some insurance carriers have denied personal auto claims which were completely unrelated to ridesharing after discovering a car was used outside of the usage clause stated on the policy (i.e. a livery business). So who is covering you during your ride? It’s a scary question, and we have answers.
Even in 2017, adequate coverage for ridesharing is still a hotly debated grey area for the personal insurance industry in South Carolina. In fact, very few insurance carriers offer a true ridesharing policy. A ridesharing policy is considered to be a unique “hybrid” between a personal policy and commercial policy, so it is not considered to be the same as a personal auto policy. In states where ridesharing policies are not available, a commercial auto policy should be used to cover all the coverage gaps that a personal auto policy cannot provide.
So whose insurance pays first, or at all?
In a ridesharing accident, the driver’s underlying ridesharing policy is considered to be primary and is triggered first. After the coverage limits are exhausted, Uber’s commercial auto policy will kick in up to $1 million in liability per incident (which includes UM/UIM Motorist coverage). It’s important to note that Uber’s coverage limit is the maximum liability coverage you could have for a traditional personal auto policy without buying additional umbrella insurance. So, that’s good news for you! Even if a driver only has a standard personal auto policy, Uber still covers you personally.
Alternatively, Uber’s website states its own commercial auto policy takes precedence over any personal auto coverage while driving on the app, so Uber only requires drivers to maintain proof of personal auto insurance. Realize that even if a personal auto insurance policy is acceptable to Uber, the ridesharing exposure may be completely unacceptable to the driver’s insurance carrier. As an additional warning to those who hope to pay a lower fare by using ridesharing outside of the app (or on the side), riders risk taking a 100% completely uninsured ride!
Yes, Uber really has stepped up to the plate to fill most of the driver’s insurance gaps as it pertains to you while you are riding, but it doesn’t cover everything. Uber’s Collision, Comprehensive, and Medical Payment coverages drop to minimum coverage or become completely nonexistent as soon as a rider finishes his ride, so the real burden of proper coverage for all of these coverage gaps falls on to the driver and not Uber. To compound the situation further, if a driver’s new car is leased or financed in South Carolina, it may be completely ineligible for ridesharing. We already see some finance companies exclude ridesharing in their loan/lease contracts.
So how does a ridesharing driver get proper coverage?
To properly insure you, other motorists, the driver, and his own car, a true ridesharing auto policy should be in place. If one is not available in your state, a commercial auto policy may be needed. Also, if a vehicle normally requires a commercial driver’s license, South Carolina requires you to have a commercial auto policy. The single most important thing for ridesharing drivers is to be open with their insurance agent about how they really use their cars. Leaning on the expertise of an independent agent to identify all of the auto policy risks for drivers and riders can go a long way in keeping everyone safe.
Now that you know your real risks as a rider, if you are bold enough, next time you are ridesharing, ask your driver if he ever purchased any new additional insurance or confirmed with his agent that his traditional personal auto policy would remain reliable. You may be surprised of the answers you hear!
Stay Safe Out There!
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