Thinking about Uber?

Flexible hours and a “guaranteed” first month’s pay of $5000?! It seems too good to be true. It is. Don’t get me wrong, I am huge fan of Uber. I regularly use the taxi service in New York CIty, Washington DC, and even West Chester, PA.

For those of you who have yet to hear of Uber, it is essentially a taxi service run from your smartphone. You use the app on your phone to request a driver; they pick you up, take you wherever you want and you get out. The app securely stores your payment information and pays the driver. There is never a need to exchange money. It is safe, secure and convenient. One of the most unique aspects of Uber is that each driver works for themselves. Almost anyone can install the app and, assuming they pass safety rules and regulations, can begin driving for Uber and work as little or as much as they’d like.

But, and there’s always a but, who is responsible for liability and damage coverage for the driver, their car, and their passengers? Well, that is a very good question. Most insurance companies are trying to determine the answers to those questions too. At this point, several companies have suggested a three-stage approach to coverage. Phase one begins when the driver turns on the Uber app and is looking to pick up a fare. Phase two occurs once the driver receives an invitation on the app to pick up a fare. Phase three starts when the driver picks up the passenger until they exit the car. In phase one, Uber provides no coverage as no transaction has effectively taken place. Unfortunately, your personal auto insurance may not cover you either as most policies exclude livery service. In phase two, Uber offers only $100,000/ $300,000 in bodily injury liability insurance. In phase three, Uber offers $1 Million in coverage to the driver.

At the end of the day, driving for Uber can be a great way to make some money. It is very important that you speak with your agent or insurance company to ensure that you are protected during all periods of driving. The last thing you want is to injure someone in phase one and be on the hook for a thousands of dollars.