Uber, the controversial ride-sharing app, is coming to Des Moines. So what does that have to do with insurance?
The app connects people looking for a ride with people who are willing to give them a ride, using the later’s personal car. The driver has to apply to Uber to be a driver, meet some requirements, and then must adorn the pink mustache* to the front of their car when in service. The app is not without it’s share of controversies.
Some professional cab and chauffeur companies decry the app’s ability to skirt regulations and requirements that the cab and chauffeur companies must follow. The jury is still out on the legality of the drivers using their cars to act as a cab service without following those same regulations. However, one thing we know to be true, your personal car insurance will not cover you if you are an Uber driver.
If you apply to be an Uber driver and are accepted you are operating as a cab. If you accept money to give people rides in your car your personal car insurance is essentially null and void during that trip. There are some exceptions to this rule, like a buddy giving you gas money for a road trip. Uber definitely does not fit into that exception.
To ensure you are adequately covered as an Uber driver you will need a commercial auto insurance policy. These can get pricey and difficult to find. The annual premium can range from $2,000 for bare minimum coverage with a driver with a perfect driving record up to $10,000 for full coverage and high limits. Often times, an independent insurance agency, Like Phillips Stafford Insurance Group, is the only way to get these policies.
If you operate as an Uber driver using your personal insurance policy and cause an accident or have any kind of covered event, your claim is likely to be denied. This means you personally would have to pay for the damages. If you T-bone a BMW and injure someone in the process, the bills could easily wipe you out, financially. From the rider’s perspective, getting into a vehicle with a driver not properly insured is a dangerous proposition. If you were in the car when the driver T-boned that BMW and you were injured, you would be suing the driver, not his insurance company, for your medical bills. The driver will likely have much shallower pockets than the insurance company, making it difficult to collect.
Think you can trick your personal insurance carrier and just tell your passengers to claim they are friends and didn’t pay you? Try that with a pink mustache* lying at the scene of the accident and a complete set of data on your phone, your passengers phone, and Uber servers showing where you picked the passengers up, where you are bringing them to, and the agreed fee. You will be busted.
Before signing up as an Uber driver be sure to contact us to get a solid quote on proper insurance coverage. And before riding with an Uber driver, ask them to show you proof of commercial auto insurance coverage. It’s for everyone’s own good.
*Note: After posting this we were informed by a comment made on our Facebook page that the pink mustache is a trademark of a competing phone app, Lyft. Our apologies for the confusion. But we are still keeping the picture, because it’s pretty awesome.