New Law Protects Drivers and Passengers of Ride-Sharing Companies

Much has been talked about in the news as of late regarding Uber and other ride-sharing apps. What you may not know is that many of these drivers are operating their private cars with their private insurance. That means that, in an accident, you may not be covered for injury, depending on what type of policy the driver carries. Until now, that is.

The incident that gave birth to the idea of the law occurred in 2013. An accident involving an Uber driver took the life of a 6-year-old girl and injured her mother and brother. It was found that, because the driver had not yet accepted a fare, he was not covered by Uber’s insurance policy. The phase before accepting a fare is called Period 1. The driver is logged into the app but has not accepted business.

As of July 1, Uber and other ride-share businesses, must cover drivers who are logged into the app. Coverage includes injury, property damage, and death to third parties. There must also be coverage in place that covers especially bad accidents. What this means, in essence, is that the companies are now liable for drivers from the moment they open the app until the time they close it.

The law also specifies that drivers’ personal policies cannot cover any incidents that occur during Period 1. This will prevent lengthy fighting among insurance companies to determine who will pay out. Uber, Lyft, and other ride-sharing companies are all effected by the new law.

Most drivers have kept their status on the down low to avoid being charged more from their own insurance companies. This means that they are rarely covered at a rate that is appropriate for carrying paying passengers.

The new law, AB 2293, requires that ride-sharing companies carry primary insurance for Period 1. Coverage includes $50,000 per bodily injury, $30,000 for property damage, and $100,000 total for bodily injury. Companies can choose to increase their coverage if they choose to do so. Also included in the law is the requirement of these companies to alert drivers to the new changes.

Ride-share companies are stressing that the law is not going to affect drivers’ status. Drivers do not need to do anything differently to remain eligible to drive for the companies.

If you need an attorney, we are here for you. Whether you have been accused of a crime or have been injured in an accident, contact our offices as soon as you can. We will work for you. Call now.

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