When you're in a car you hailed through a ride-share app on your smartphone, are you covered by insurance if you end up in an accident?

See also: Young Woman Creeped Out by Uber Driver During Post-Club Ride

The National Insurance Association says no. While firms such as Uber and Lyft say they maintain $1 million coverage in “excess insurance” per incident, the devil's in the details: The companies say the driver's own personal insurance is the coverage of first resort.

And Uber, for example, says you're not really a customer, and the driver is not their “partner” (never employee), unless the app has activated an on-the-record ride:
Police said recently that a drunk-beyond-judgment L.A. Uber customer was put in the car of an erstwhile Uber driver who was posted up at a West Hollywood club, only to be taken to a seedy Panorama City motel.

If the car had crashed, the woman's insurance options would be limited because, as the company told us, the app had not been activated and that was not an official Uber ride.

In fact, a situation that tested the limits of the ride-share firms' insurance stance took place last New Year's Eve, when a driver killed 6-year-old Sofia Liu while she was strolling with her family in San Francisco.

The company argued that the tragedy should not be covered because the driver didn't have a fare at the time.

Both the state Public Utilities Commission, which has given the app companies the green light to operate in California, and state legislators are now addressing this insurance gap.

The PUC has proposed regulations that require ride-share drivers to carry $1 million insurance at all times, not just when they have a fare in the backseat.

Likewise, two bills working their way through the state Legislature have proposed to require greater scrutiny, including one that would increase coverage time behind the wheel, for ride-share drivers.

Uber has already begun to require $100,000 coverage “between trips,” but critics say that's not enough.

The National Insurance Association, which represents members that would benefit from higher coverage amounts, says it's time that the ride-share apps got real about coverage and stopped trying to rely on drivers' personal policies, which it says “forbid people from turning their cars into commercial taxis.”

Dave Sutton of the Taxicab, Limousine & Paratransit Association says:

Any drivers who think they are protected by their personal auto insurance when they get in an accident while working for Uber and Lyft simply won't be. These massive insurance gaps need to be closed.

In any case, rider beware.

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