Who Pays When An Uber Or Lyft Causes An Accident?
Uber and Lyft currently have tens of thousands of drivers in Florida, providing more than 24 million rides throughout Florida in 2016. Previously, operating under very little regulation, Uber and Lyft drivers were often Under Insured and even Uninsured while driving, exposing Florida residents and Tourists to serious financial harm.
In the past, there was a lot of uncertainty about who paid for the damages caused by an Uber or Lyft driver because of a complex system of variables.
First, did the Uber or Lyft driver have a personal insurance policy that was willing to cover the damages? Many personal insurance policies exclude ridesharing.
Next, did the Uber or Lyft driver have a passenger? If the Uber or Lyft driver was carrying a passenger, then the company's commercial policy covered the damages.
However, if the Uber or Lyft driver was working (had the App On) but was waiting for a fare (no passenger) and caused an accident, then the company's commercial policy did not cover the accident. Additionally, if the Uber or Lyft driver's personal insurance excluded ridesharing, then the driver's personal insurance did not cover the accident either. This situation is known as an insurance coverage gap.
It was this gap that allowed Uber to deny responsibility when an Uber driver, who was working, but waiting for a fare, accidently struck and killed a little girl a crosswalk.
Although some Uber or Lyft drivers purchase separate gap insurance coverage, this gap insurance is not required.
Finally, if your Uber or Lyft driver caused an accident while you were a passenger in their car, the company's commercial policy did not cover these accidents because the drivers are not employees. Therefore, if your Uber or Lyft driver was distracted, drunk or otherwise negligent, you were limited to the driver's personal insurance, if their personal insurance covered ridesharing, or your own insurance.
Obviously, this complex system of insurance coverage caused a lot of confusion, and exposed many Florida Residents and Tourist to financial harm when using Uber or Lyft; therefore, the Florida Legislature finally took action, and passed HB 221 on April 19, 2017.
HB 221, creates statewide regulations for ridesharing companies, like Uber and Lyft, and overrules the local rules across Florida, including the local rules in the Florida Keys banning Uber and Lyft.
HB 221 was sent to Gov. Rick Scott for his signature, and if signed, the law will go into effect on July 1, 2017.
Samantha Sexton, vice president of Legislative and Regulatory Affairs for the Personal Insurance Federation of Florida said that this bill "ensures that when drivers are operating during the app-on to app-off time frame, there are clear levels of required insurance to protect the driver, passengers and others sharing the roadways. If enacted, the bill will clarify the claims process, which will help consumers recover their losses faster.”
Specifically, HB 221 would require drivers to undergo criminal background checks to exclude people with certain convictions, including sexual assault and drunken driving. The bill would also require drivers to carry a $1 million liability insurance policy.
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