In Part 1, Uber and Lyft – What You Need to Know, I discussed Assembly Bill 2293’s three stages of insurance coverage. In this post, I will attempt to examine it from a passenger point of view. I will also try to flesh out some glaring holes or problems that were not addressed by the law. This is something passengers should be aware of. But before that, here’s a quick recap of the law.
Stage One applies when a driver logs on and hasn’t accepted a ride, but doesn’t concern passengers. Stage Two applies when a driver accepts a ride on the app and ends when the driver completes the transaction on the app or until the ride is complete. Stage Three applies when a passenger enters a ride and until the passenger exits the vehicle. Stage Three provides uninsured and underinsured motorist coverage up to $1,000,000.00.
The Exiting The Vehicle Problem – So, you summoned Uber or Lyft with your app. The driver arrives and you get in. You have a destination that you have already told the driver. It’s loaded onto the driver’s app. Let’s call this Destination A. When you get to Destination A, you realize it’s the wrong destination, so you tell the driver the correct destination, Destination B, but the driver doesn’t load it into the app because you give him verbal directions. An accident occurs on the way to Destination B. Are you still covered by Uber’s and Lyft’s insurance coverage requirement under AB 2293? Yes. Remember, Stage Three insurance coverage ends when the “passenger exits the vehicle.” You haven’t exited yet. You’re good.
Ok that was easy, but let’s say it’s the same scenario and you arrive at Destination A, this time you get out of the vehicle and quickly realize it’s the wrong destination! You get back in and you give the driver verbal directions to Destination B. What happens now if an accident occurs on the way to Destination B? Stage Three insurance coverage ended when the ride is complete because you exited. Does the mere fact of “re-entering” the vehicle make Stage Three insurance apply? I don’t know because AB 2293 Stage Three does not cover this scenario.
Does Stage Two insurance coverage apply? Stage Two requires that the driver “accept a ride request” on the app and ends when the ride is complete or when the driver completes the transaction on the app. Here, your first requested destination, Destination A is complete. You haven’t requested and the driver hasn’t accepted another ride on the app to Destination B. So, Stage Two coverage doesn’t seem like it will apply. But what does apply? Right now, again, we do not know. AB 2293 does not cover this scenario on its face (what I mean is that the wording in AB 2293 does not specifically cover this scenario, just like the above scenario). The court will have to interpret it and either cover this scenario or not. It will be undoubtedly tested in court by lawyers for either the injured victim or Uber/Lyft. The outcome is unknown. But, you should avoid being the guinea pig here and know about this scenario. The simplest thing to do is, don’t get out of the vehicle!
The Hailing a Ride Problem – You see an Uber or Lyft driver that just had his or her passengers exit the vehicle. You hail the driver down and ask for a ride. The driver verbally accepts and you give the driver verbal directions to your destination. The driver’s app is logged on but the driver has not officially accepted the ride on the app. An accident occurs on the way to your destination. Does Stage Two coverage kick in? Well, for Stage Two coverage to kick in, it requires that the driver “accept the ride” on the app. So, the simple answer is no. What about Stage Three? Stage Three coverage starts when you enter the car. But that presumes that you were the one that requested the ride and the driver has accepted on his app. Does Stage Three kick in merely because you entered the vehicle even when you didn’t request the ride and the driver hasn’t accepted anything on the app? Again, we don’t know because AB 2293 does not cover this scenario as well. But you know what you should avoid doing right? For now, don’t hail any Uber/Lyft driver!
The Driver Logs Off Problem – Let’s take the two scenarios above and before you re-enter the driver’s vehicle or right before you hail the driver, the driver logs off the app and FORGETS to turn it back on! An accident occurs. Are you covered by Uber and Lyft’s? The harsh answer here is no. Remember the law only applies when the app is turned on and only requires Uber or Lyft to provide insurance coverage if one of the three stages apply. So, what should you do? Avoid the two scenarios above.
The Per Person or Per Accident Problem – The way AB 2293 is written, it doesn’t specify whether the uninsured or underinsured motorist coverage requirement is “per person or per accident.” The law clearly states that there is $1,000,000.00 in uninsured or underinsured motorist coverage for Stage Three. It clearly indicates that there is liability coverage for $1,000,000.00 for death, personal injury, AND property damage for Stage Two and Three. This liability coverage is total and not per person. However, the uninsured and underinsured provision of AB 2293 doesn’t specify. This can be devastating to passengers. Let me show you by a simple example that may occur. Imagine that you are in a one of those Uber vehicles that can carry 6 passengers plus the driver. An accident occurs, and the non-Uber driver is at fault for the accident with minimum coverage (15K per person, 30K per accident). You as a passenger along with the other 5 passengers should be covered under the uninsured or underinsured requirements of the law for any injures above the minimum limit. But, not so fast, here’s where the distinction is important.
If the uninsured motorist or underinsured motorist requirement is $1,000,000.00 per person, then each passenger’s maximum uninsured or underinsured motorist coverage is $1,000,000.00. That is a lot of money and in majority of cases, passengers will be fully covered for their injuries. But, if it is $1,000,000.00 per person, then 6 severely injured passengers may not get full compensation for their injuries. The $1,000,000.00 policy will get exhausted fast with 6 people claiming a right to it. There’s no way of getting around this for now until the court has decided whether this requirement applies on a per person or per accident basis. But you know what you should do, make sure you have sufficient personal automobile uninsured or underinsured motorist coverage to cover you and only you. Another tip, your own uninsured or underinsured motorist coverage follows you around like your shadow, even when you are in someone else’s vehicle.