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Lyft Offers Additional Coverage in Case of a California Car Accident – Is it Enough?

Lyft, a popular ride-sharing application, has announced that it is increasing the auto insurance coverage for its drivers. Currently, the law in California only requires ride-sharing companies, like Lyft, Uber and Sidecar, to carry one-million dollars in car accident liability insurance. This is the insurance coverage that covers people who are injured in an accident caused by a driver working for one of these companies.

The law does not, however, require that the companies provide collision coverage, which is used to repair the vehicle damaged in a car accident, or uninsured motorist coverage, which would cover the driver and passengers of the vehicle, if the other driver causes the car accident and does not have coverage or does not have adequate coverage for the serious injuries suffered.

According to the Los Angeles Times, Uber has said that they have been providing collision and uninsured motorist coverage since December. Lyft is now offering its drivers the option of carrying collision coverage and uninsured motorist coverage. If covered, it is unknown how much uninsured motorist coverage these companies will provide for their drivers and customers.

Lyft also has stated that the company’s insurance policy is only in effect when a driver is carrying passengers for Lyft, or if a driver has accepted a pick up for Lyft and is en route to pick up the Lyft user(s). This would mean that the commercial insurance coverage would not cover a driver who causes an accident after dropping off a Lyft customer or if the accident occurs just before the driver hits the button on his or her phone that accepts the fare. This is a problem for injury victims, as a driver may be distracted, looking at his or her phone for a potential fare, and cause an accident. In such a case, Lyft’s insurance company would argue that the driver was not covered by the insurance policy. The driver’s own personal insurance may also deny coverage on the basis of the driver using his or her car for work at the time of the collision. This insurance problem is occurring right now in the California wrongful death claim of Sofia Liu, who was struck and killed by an Uber driver. As we have previously stated, these potential gaps in car insurance coverage for ride-sharing companies need to be addressed now by California lawmakers.

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