Passengers that rely on ridesharing service companies like Uber and Lyft trust them to safely take them where they need to go. Unfortunately, whether or not the rideshare driver was at-fault or not, drivers and passengers involved in a car accident can suffer serious bodily injuries after a major car accident.
Increased use of rideshare services have raised questions about whether a rideshare driver’s personal auto insurance policy should cover accidents that happen during a rideshare.
Most states require all drivers to have some level of auto insurance coverage. Getting car insurance is relatively easy. Getting an insurance company to pay after a car accident or truck accident can be an entirely different matter, especially when it involves a rideshare company.
What is a rideshare?
Like taxis, rideshare service companies connect drivers who use their own vehicles with passengers who need pay to be transported from one location to another. Usually, rideshare drivers pick the hours that they work, and this may not always be directly managed by the rideshare company.
What do insurance companies cover?
Insurance policies only provide insurance coverage for what the policyholder and the insurance company agreed would be covered. Typically, auto insurance only covers qualifying “occurrences.” In car insurance policies, the qualifying “occurrence” is usually a car accident.
Who has the Burden of Proof?
After an accident, an injured person making a claim with an insurance company has to prove that this qualifying “occurrence” happened, triggering insurance coverage for any bodily injuries or property damages that resulted. In many cases, the car accident is the “occurrence” covered by insurance policy. Put simply, the person wanting an insurance company to cover the costs for medical treatment or car damage needs to show the insurance company that it has to pay. This claimant has to show that the accident is kind the insurance company agreed to cover.
But when the insurance company uses the wording and fine print of its contracts to exclude coverage for a particular type of issue, the burden switches to the insurance company that then needs to show that the exclusion terms apply.
In other words, the person making a claim with an insurance company has to show that the car accident should be covered by insurance. After, the insurance company then has to prove that the car accident is not covered under an exception and exclusion in the insurance company.
What is a “Business Pursuits” Exclusion?
There are a lot of different types of insurance policies. Many insurance policies have exclusions that carve out what is not included in the insurance coverage. One of these exclusions is the “business pursuits” exclusion. This exclusion specifically does not include insurance coverage for any business or business activities since usually coverage for business activities is covered under another type of insurance policy, such as a commercial general liability policy. The purpose of this exclusion is to look at whether the activity was meant to make money or not. If the activity was intended to make money or generate income, then the activity may be excluded.
“Business pursuits” exclusions may apply in kinds of cases as well. For example, let’s say someone buys insurance for her condominium. She then decides to make and sell her own candles from home. One day, there is damage to her condominium and her candles are ruined. The resident’s insurance policy may have language that excludes coverage or damage to her property as a result of doing business inside her condo.
In some cases, this makes sense. If someone spends all of their time on the road, they are likely exposing themselves to a higher chance of getting into a car accident just by being on the road more often than the average driver. While personal auto insurance covers accidents that happen while an insured driver is on the road, exclusions like this carve out exceptions to show what is not covered.
A rideshare driver should check the language in his or her specific personal auto insurance policy to see what kind of exclusions apply. Consult a skilled personal injury lawyer to see what is covered in your auto insurance policy. Contact us today.
In the context of rideshares, this means that if a rideshare driver is working at the time of the car accident and his or her personal auto insurance has a business pursuits exclusion, then his or her personal auto insurance policy may not cover any bodily injuries and property damage that happen as a result of an accident that occurred while he was on the job.
For example, if a person is employed as an Uber driver but decides to run a personal errand by shopping at a local grocery store, then a rideshare driver is not on the clock and is not working. On the other hand, let’s say that the driver is going around the city after finishing a personal errand. He or she then turns on the ride sharing application which typically shows that the driver is available to pick up passengers. In this case, he or she is on the job and working.
Some ridesharing companies’ insurance programs are designed to cover their drivers when their app is on, and it does not matter whether or not the driver had a passenger in the car at the time of the accident. For rideshare drivers, it is important to get insurance that provides coverage when the app is off so that drivers are fully covered.
What is a Policy Exclusion Rider?
A policy exclusion rider is a document, such as an endorsement, to the main insurance policy contract that adds in additional terms that need to be followed. Usually the auto policy exclusion rider contains language that specifically excludes a particular person or activity from insurance coverage.
For example, a person that may be excluded in a policy exclusion rider document is someone who is not a licensed driver in any state. Sometimes, the exclusion does not allow coverage of people within a household who is under a specific age like 21 years old.
How a judge interprets policy exclusion language depends on the federal and state laws that apply. Each state has its own unique laws. Which states laws apply often affects how a particular judge will make his or her decision as well as interpret the language of the insurance policy contract and any applicable exclusions to mean.
With this in mind, insurance companies may tailor their policies, exclusions and how they handle insurance claims depending on the laws in place.
What if I am an injured passenger in a taxi cab?
You may still be able to recover and seek compensation. In some cases, a passenger injured in a taxi cab may sue the taxi cab’s insurance company as a third party beneficiary. A legal contract term, a third-party beneficiary refers to a person who can still get the benefits from a contract even though he or she was not originally a part of the contract.
Insurance policies are essentially contracts between the insurance company and the insured policyholder. When taxi drivers have insurance policies, the drivers and insurance companies are the original parties to the insurance policy contract. Passengers may be covered when they are considered third party beneficiaries.
For example, in a case in Arizona, Napier v. Bertram, the taxi cab’s insurance company argued that it did not owe any duties to the injured passenger. The judge in this case disagreed because it was foreseeable that a passenger would be hurt by a negligent taxi driver. As a result, the passenger was considered a third party beneficiary.
Passengers that use ridesharing services hurt in car accidents need to identify which parties are involved in the case, and which insurance companies’ policies will compensate injured claimants. This requires experience, knowledge and skill from a personal injury attorney to understand which laws apply, as well as interpret insurance policies and exclusions. Consult an experienced personal injury lawyer if you or a loved one is involved in an accident.
Contact an experienced personal injury lawyer
Without experience in the insurance industry or legal experience, understanding which factors or evidence can help or hurt your case can be difficult to understand.
Are you trying to secure your financial recovery with the help of experienced attorneys? If so, we can help.
The Pusch & Nguyen Law Firm has helped countless Texans handle their insurance disputes. Our experienced trial lawyers have gone up against some of the biggest names in the insurance industry while successfully bringing home payouts for clients. Our successful reputation speaks for itself, and with offices in both Houston and San Antonio, we are well equipped to assist Texans who are in dire need of our services. Register online for a free case evaluation or call us today at 713-524-8139 (Houston) or 210-702-3000 to schedule an appointment with a member of our team.