Ridesharing and vehicle sharing services have hit the roads of cities all across the nation and globe. The concept seems simple enough, but Wisconsin drivers need to be informed of the risks.
1. Risks to passengers. Passengers should be aware of two issues. First, rideshare drivers currently aren’t subject to the regulations that taxi and delivery services follow. That means drivers aren’t required to have city-regulated vehicle inspections or background checks, a public concern to many cities. Second, if a rideshare vehicle has no insurance, the passenger may be forced to hire an attorney and file a suit for injuries against the driver – which can be costly and doesn’t guarantee an enforceable settlement. In addition, the passenger may need to file a claim under his or her own auto policy’s medical payments or uninsured motorists’ coverage.
2. Drivers may not be covered. Neither ridesharing nor vehicle sharing services are covered by traditional personal auto insurance policies. Most policies already have exclusions that apply when using a vehicle to transport people or property for a fee. Some insurers added an additional endorsement to clarify that someone using a vehicle for ridesharing or renting is also excluded from coverage. Some companies will not renew your policy when they find out your car is involved in ridesharing. Rideshare drivers need additional protection, so find out if your carrier provides such coverage.
3. A rideshare service’s insurance isn’t enough. Some rideshare services offer supplemental liability insurance to their drivers for coverage while they are operating as a rideshare driver. But that does not provide coverage for expenses incurred to repair damage to their own vehicle. It also doesn’t include other expenses that can result from an accident, such as medical bills. Ask the rideshare service for details about their insurance coverage.
4. What can go wrong? A recent case illustrates that the stakes are high. A six-year-old girl was killed in a collision with a rideshare car in San Francisco. The driver said he was awaiting a fare at the time of the accident. Because the driver wasn’t transporting a passenger when the accident occurred, the rideshare company said he wasn’t covered by their policy – leaving the driver financially responsible. The case is still in litigation, but it is estimated that damages could go as high as $20 million.