The Law Brothers, Shawn and Shervin Lalezary’s Guide to Understanding Car Insurance Payouts for Individual and Rideshare Drivers

Car insurance in California is a complicated beast, not to mention the added complexity of ridesharing. Regardless, everyone should have some idea of the amount of coverage they have in the case of an accident.

Individuals

California is one of the many states that require drivers to carry car insurance at all times. While they accept a few forms of insurance coverage, motor vehicle liability insurance policies are the most common.

The minimum liability insurance requirements (per California Insurance Code §11580.1b) are:

  • $15,000 for injury/death to one person.
  • $30,000 total for injury/death to more than one person.
  • $5,000 for property damage.

What does this mean? Your minimum liability insurance compensates others when you are at fault for an accident. Considering the inflated costs of medical care and cars, $15,000 for injury and $5,000 for damages will not go that far.

Suppose a driver strikes you, totals your four-year-old Honda, and sends you to the hospital for three days. In that case, you are going to be left picking up a considerable tab out of pocket carrying the minimum policy required by the state. Shawn and Shervin of The Law Brothers recommend uninsured or underinsured motorist coverage to pay the additional costs not covered by the at-fault driver’s policy.

The additional coverage ensures that accident victims can recoup more of the costs associated with the accident. When choosing this type of addon to your policy it’s important to assess how much insurance you will need. Talk with your insurance rep about the value of your car, your current income, and how much of a hit your savings can take in the case of lost wages to come up with an amount of protection that works for you.

Rideshare

Rideshare policies and litigation for the injured are much more complicated. In these situations, there are commonly more than two insurance companies involved. As a rideshare provider, you also need to be aware of the different stages of coverage while working.

For rideshare drivers, there are four stages or periods, 0–3:

  • Period 0
    • You are considered in period 0 when your Transportation Network Carrier (TNC) app is off, and you are driving.
  • Period 1
    • In period 1, the app is on, and you are waiting to be matched with a passenger.
  • Period 2
    • You are en route to pick up your passenger.
  • Period 3
    • There is a passenger in your car; this period does not end until the ride time is over on your app, or the passenger leaves your vehicle.

Understanding the different periods is important because they come with varying coverage amounts. As you can imagine, during period 0, your TNC, such as Uber or Lyft, does not provide coverage on your behalf in any situation.

During period 1, your TNC provides liability insurance only; they will cover:

  • $50,000 for injury/death to one person.
  • $100,000 for injury/death to more than one person.
  • $30,000 for property damage.

If the driver obtains “rideshare endorsement” in their personally held policy, the $100,000 coverage is doubled to $200,000. It is important to note that your TNC does not provide uninsured or underinsured motorist insurance during this period. So, if you are in an accident that is not your fault, you risk being undercompensated by drivers with minimum coverage.

During periods 2 and 3, TNC coverage changes. Uber and Lyft offer drivers $1 million primary commercial insurance liability coverage. Despite this, drivers must submit claims through their personal policy company before filing with the TNC.

The major TNCs also offer drivers $1 million uninsured and underinsured motorist coverage during these periods. So, during these times, costs are covered for all parties involved in an accident, but there are deductibles.

Caveats

Here are a few tips about accidents as a rideshare driver. Period 2 has a gray area when passengers cancel rides. If you are picking up a passenger, and you get into an accident, then the passenger cancels the ride because it’s taking too long; your TNC could attempt to evade period 2 payouts claiming you were technically in period 1 in the same timeframe as the accident. One way to avoid this is to take a screenshot of your progress to the customer just after the accident. You can also use an additional dashcam or recording software on your phone as a way to document your activity.

In the case of a hit and run where you are not at fault, you want to document as much as you can in the situation, search out witnesses, and file a police report to establish proof. Without proof, your TNC will not payout.

As a driver in any situation, it’s important to have the coverage you need. Take a serious look at your insurance policy and consider if it will be enough in the unfortunate event of a terrible accident. As a rideshare driver, it is of the utmost importance to carry sufficient coverage of your own. If you do get into an accident that is not your fault anywhere in California, The Law Brothers can help protect your rights and get you fair compensation from the insurance industry giants. Consultation is free, and their services don’t cost a dime until you are paid; schedule a free consultation today.

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