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Ride-Sharing Service… Do I Need Auto Insurance When Riding?

During a lunch conversation today with a friend and colleague in the insurance industry, we discussed the amount of insurance an UBER driver must maintain. I know, riveting conversation. The topic was brought up after I mentioned reading this article about a local entrepreneur in St. Louis who was seriously injured while riding in a cab:


If you’re riding in your car, you know how much insurance you have if you’re in an accident. That’s easy. But what if you’re in an accident while using a ride-sharing service like UBER, LYFT, or a taxicab? It gets much more complicated.

Below are summaries of the insurance requirements of two ride-sharing service options:


Uber and LYFT are substantially similar in their insurance procedures. Coverage is based on their app’s usage. For example, if you’re in an UBER/LYFT. You, as a passenger, are protected (according to UBER and LYFT) with a $1 million liability policy. This coverage applies when the UBER/LYFT app is activated. And you have engaged UBER/LFYT for a ride. So if the UBER/LYFT driver causes the crash, you (and the person(s) the UBER/LYFT driver hit, if applicable) have $1 million in coverage for your losses. This amount of coverage is similar to what commercial transportation and trucking companies must carry under Federal regulations.

If the accident is not the fault of the UBER/LYFT driver, UBER/LYFT carries $1 million of uninsured and $1 million in underinsured coverage for your loss. It would be applicable if the driver who hit your UBER/LYFT vehicle had no insurance or carried a small insurance policy ($25k in Missouri is the minimum). If your damages exceed $25k, you could tap into UBER’s underinsured policy. Presumably, these limits would be in addition to any limitations you carry with your insurance carrier.


The taxi business in Missouri has had issues with bureaucracy for decades. The fight to keep up with current ride-sharing services has taken a real financial toll on St. Louis taxi companies. Nevertheless, they’re doing everything they can to stay competitive in a changing market. To try to keep pace, the MO Taxicab Commission has DECREASED(!) its liability limits. Currently, St. Louis area taxis must maintain just $50/$100k coverage, meaning up to $50k in range for one loss or death and up to $100k in coverage for more than one injury or death.

I find this amount to be astonishingly low, given that individuals in Missouri are only required to have $25/50K in coverage. Further, taxi and cab companies often claim that their drivers are independent contractors, not employees, to avoid corporate liability for the accidents and acts of their drivers. Their fights against “respondeat superior” liability have included disputes in civil courts and workers’ compensation courts.

So, in sum, if you have a choice, you’re much better off from an insurance perspective if you choose UBER or LYFT. While both services still have a ways to go on specific aspects of their operations (driver screening, CEO supervision :), etc.), UBER and LYFT have far better insurance limits than those of a St. Louis-area taxi. And the amount of insurance coverage matters when you’ve been in a significant crash.

Contact me today to schedule a consultation.


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