The growth of what is known as peer-to-peer taxi services, such as Uber and Lift, are causing many people to question what the insurance requirements are for those who choose to drive for such companies. Uber and Lyft allow drivers to use their own vehicle to transport others the same way that a taxi does, and many are questioning whether those drivers would be covered should an accident happen while they are working for the rideshare companies.
Florida Insurance Coverage Requirements
Florida statute requires anyone who operates taxicabs, limousines or other for-hire transportation to hold a motor vehicle liability policy with minimum limits of $125,000/$250,000/$500,000. Uber covers the driver for $50,000/$100,000/$250,000 plus the bodily injury and uninsured motorist coverage rises to $1 million each. Drivers must also have comprehensive and collision coverage in order for Uber’s policy to kick in. Lyft also offers contingent liability of $50,000/$100,000/$250,000 as well as bodily injury, property damage and uninsured motorist coverage of $1 million. This means that the limits offered by both companies are much less than required by the state of Florida, which would mean the driver would be required to obtain the additional insurance on their own.
Uber goes further by dividing insurance liability into periods. Period 1 is when a driver is waiting for a fare but is logged into the app which many in state legislature believe is the definition of for-hire. In addition, Florida law states that insurance policies must be a member of the Florida Insurance Guaranty Association, yet the insurance provided by Uber is through a Bermuda-based company that does not belong to the organization. Although Uber may be able to turn their insurance off and on, most individuals in Florida are not able to do so as the law requires them to be categorized as either commercial or personal. In other words, personal insurance policies will not allow someone to use their vehicle as a taxi one hour and a carpool for neighborhood kids the next.
Development of Part-time Commercial Use Policy
There are insurance companies who are working to develop a part-time commercial use policy so that individuals may more easily use their personal vehicle for business purposes. However, this may require significant changes in the auto industry as a whole. Most car loans and leases specifically forbid owners from using their vehicle for commercial purposes. If a finance company learns that an individual is using the vehicle commercially, they have the right to declare the loan in default and repossess the car if the owner cannot pay the balance in full immediately.
Before an individual decides to enter into a contract to drive for Uber or Lyft in an effort to make additional money or to start their own business as a taxi driver, it is important to discuss their situation with an insurance agent to be sure they will be covered should an accident happen. In addition, it is important to read the terms of any loan that exists on the car to be sure that operating it commercially does not violate the rules of the finance company.