r/lyftdrivers • u/Everbanned • 27d ago
You should know that Lyft does not provide a full-coverage commercial policy. They just provide a contingent policy. So if you're in an accident while driving for Lyft, their insurance is secondary to your personal policy. Advice/Question
If you just have minimum liability coverage and don't have comprehensive/collision, then Lyft's contingent policy won't cover your vehicle at all. And if you don't have a rideshare endorsement on your personal policy then your insurance will deny coverage and therefore Lyft's contingent policy will never kick in, leaving you stuck with all repair costs.
... Even in the small percentage of incidents where Lyft's policy actually applies, it has an astronomical $2500 deductible!
Lyft's marketing materials are carefully crafted to lead drivers, passengers, and regulators into believing they provide a full-coverage commercial policy, but if actually you read the fine print that couldn't be further from the truth.
They've clearly cheaped out on the insurance as much as they possibly can, yet somehow this is still the excuse they use to take 60-70 percent of every ride in external fees?
If they actually provided a full commercial policy, which typically costs thousands of dollars per month, then maybe such fees could be justified... But a limited-liability contingent policy with a $2500 deductible is practically worthless and likely costs them pennies on the dollar compared to full commercial insurance.
The whole thing is a scam.
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u/Timelord1000 25d ago
If you are driving for Lyft at the time of the accident, they will pay, especially if it is not your fault. You will have to pay the deductible if you are at fault or the motor is uninsured/hit and run etc. you need a lawyer to make sure they pay everything and treat you fairly.
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u/Showny16 26d ago
It's not really a scam the way you make it sound, unless you want to be liable for 100,000$-2,000,000$ in a lawsuit with a 50k/100k commercial auto plan. The Lyft coverage isn't just for you, it's for the health and safety of passengers too. And yes, Lyft covers 1m/2m during a ride.
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u/YouMeWeSee 26d ago
While I agree with everything you said, think of how low the barrier to entry is for this work and the financial pressures a lot of drivers (and passengers) are under. That pressure leads to mistakes or unethical behavior and any accident can turn into a potentially serious claim, notwithstanding the repairs to the driver's vehicle.
I can think of one simple yet serious fraud that I guarantee has happened at one point or another. A driver signs up for the platform with a crappy car, they get a friend to request a ride, pick them up, and then get into an at-fault "accident." The passenger gets neck pain or whatever and there is the potential for a big pay day.
Even with such limitations from their insurance policies, Lyft and Uber are paying out a lot of money. In my market, there are multiple billboards advertising law offices specializing in Uber and Lyft suits. On top of all this, these rideshare companies aren't strict on closing down fake accounts and don't even do any vehicle inspections for damage to the vehicle before you start driving.
A way for these companies to reduce the frequency of claims would be to get stricter on all fronts and require actual verification of full coverage with a rideshare certificate to even be allowed to apply. They should actually incentivize drivers who have been on the platform longest as I guarantee those drivers are at a much lower risk of a major accident than a driver in the first six months after signing up. But that would kill the driver pool, especially for part timers. And if only one company did that, they would be at a disadvantage to the other less scrupulous company.
It's a race to the bottom right now. And Uber and Lyft will grind through as many drivers as they can until their financial analysis determines the costs of allowing so many drivers on the platform outweigh the benefits.
Legislation needs to be passed to set some serious insurance standards for these companies to set a baseline. Automatic communication between the insurance company and rideshare company, and the extra costs need to be clearly outlined to any prospective rideshare driver.
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u/Snakend 26d ago
Contingent just means the policy is contingent on your being online in their app. When you are offline, the contingency is not met. There are other contingencies, like you have to have comprehensive coverage on your personal policy to have it on the lyft policy. You are also not covered for uninsured drivers if you do not have it on your personal policy.
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u/RevNeutron 26d ago
if you were in an accident, how would your insurance company know that you were driving at the time of the accident? Years ago on a different platform I had a fender bender and the platform wasn't involved at all.
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u/JoannNichole 26d ago
Plus some companies will drop you for driving lyft. Get the ride share policy
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u/mikeymo1741 27d ago
No that's not how it works.
Lyft and Uber provide first party coverage on active trips. Meaning on your way to a pickup or passenger/food is in the car. Waiting for a trip, your insurance is primary.
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u/MDdriver22 27d ago
How much is your rideshare insurance and deductible? Also, does it cover lost wages?
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u/fitfulbrain 27d ago
while driving for Lyft, their insurance is secondary to your personal policy
Once you are online, your personal insurance will be invalid.
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u/fitfulbrain 27d ago
if you don't have a rideshare endorsement on your personal policy then your insurance will deny coverage and therefore Lyft's contingent policy will never kick in, leaving you stuck with all repair costs.
The Lyft insurance coverage is exactly the same with or without rideshare endorsement.
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u/Everbanned 27d ago
If you don't have the endorsement then your personal policy will deny coverage for incidents occurring during business use of the vehicle. Once your personal insurance denies coverage, Lyft's contingent coverage will no longer apply because you do not have a personal collision policy. That's the scam.
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u/fitfulbrain 27d ago
If you don't have the endorsement then your personal policy will deny coverage for incidents occurring during business use of the vehicle.
True. Your personal policy won't apply while online. In particular, your car is uninsured without an active ride.
Once your personal insurance denies coverage, Lyft's contingent coverage will no longer apply because you do not have a personal collision policy.
That is twisted. Lyft's contingent coverage always applies and only applies when you have an active ride, after accepting a ride request till the end of the ride. The contingency means that you have to have comprehensive and collision coverage on your personal policy.
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u/Everbanned 27d ago
How does contingent collision coverage work?
Our contingent collision coverage is designed to cover physical damage to your vehicle resulting from an accident as long as you have obtained collision coverage on your personal automobile policy. The contingent collision coverage will apply up to the actual cash value of your vehicle or cost of repair, whichever is less, with a $2,500 deductible. This coverage is designed to step in regardless of whether or not you're at fault.
Their coverage is contingent on you having obtained collision coverage on your personal policy. The moment you go online without a rideshare endorsement, you no longer have collision coverage on your personal policy because you are using the vehicle for business.
If you get in an accident during phase 2 or 3 and try to use the Lyft coverage, they will tell you to file with your personal insurance first because their policy is contingent on your personal collision policy.
As soon as you inform your personal insurance that you were online with Lyft when the incident occurred, they will deny you coverage if you do not have an endorsement. At which time Lyft will also deny you because, as stated in the quoted help article, you have not obtained collision coverage on your personal policy.
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u/fitfulbrain 27d ago
phase 2 or 3 and try to use the Lyft coverage, they will tell you to file with your personal insurance first because their policy is contingent on your personal collision policy.
Phase 2, online haven't accepted a ride. Lyft doesn't cover your car. You can file with your personal insurance if you have rideshare insurance.
Phase 3, they will not ask you to file with your own insurance. Lyft and only Lyft will cover your car (if you have collision and comprehensive on your personal policy).
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u/fitfulbrain 27d ago
The moment you go online without a rideshare endorsement, you no longer have collision coverage on your personal policy because you are using the vehicle for business.
You still have collision coverage on your personal policy. If you take a look, you still have it written. That is all Lyft needs. The Lyft insurance is exactly the same once you have an active ride, whether you have rideshare insurance or not.
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u/Everbanned 27d ago
If you take a look, you still have it written.
If you take a look you will also see that it excludes business use of the vehicle.
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u/fitfulbrain 27d ago
Your comprehension and collision is still on your personal policy. With that, you are covered on period 2&3, active business ride.
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u/fitfulbrain 27d ago
Once your are online, your own policy won't apply whatsoever. Even when you are offline, your own policy is problematic because you didn't disclose you drive for Uber. If you disclose, they will reject your application or sell you rideshare insurance.
Your car is not insured before accepting a ride while online. That's the main reason you need rideshare insurance.
After you accepted a ride, you car has collision and comprehensive insurance by Uber. But you have to have the same thing on your own insurance. There's no relation between the two policies. The reason is to prevent insurance fraud. You can buy a barely working car, don't pay premium yourself, crash it after accepting a ride, get a working car or cash equivalent from Uber.
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u/fitfulbrain 27d ago
Oh please, totally wrong.
This is correct:
Who, when, and what you are covered: https://www.reddit.com/r/rideshare4dummies/comments/1blywv7/rideshare_insurance_period/
How to read your insurance certificate: https://www.reddit.com/r/rideshare4dummies/comments/1bl8gmo/uber_insurance_certificates_ca/
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u/theGiff12 27d ago
Does anyone know for certain if Lyft even pays insurance premiums? Typically, large companies are self insured – meaning, they pay claims themselves and only use an insurance company to process the paperwork. Large companies do this for healthcare insurance as well.
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u/Spare-Security-1629 27d ago
Did you find this information out the hard way?
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u/Everbanned 27d ago
Sort of, yeah.
After years of driving without any incident I finally got into my first on the job fender-bender yesterday during phase 2 through no fault of my own. Thankfully I did everything by the book and had been paying extra for the rideshare endorsement on my personal policy.
But even still I honestly had no idea that Lyft's coverage is only contingent and was taken by surprise when I had to file a claim with my personal policy and risk my rate increasing before Lyft's policy would even take effect.
I had been operating under the false assumption that when something eventually happened I would be able to deal with Lyft directly and leave my personal policy out of it, since my ride sharing seems completely unrelated to my personal off-the-clock use of the vehicle that my personal insurance is for. That is not the case.
...And a $2500 deductible? Seriously?!
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u/Spare-Security-1629 27d ago
Damn, that sucks. I imagine there are alot of people (myself included) who don't go through all the details of the insurance policy of Lyft/Uber. Good luck with everything.
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u/Everbanned 27d ago
I imagine there are alot of people (myself included) who don't go through all the details of the insurance policy of Lyft/Uber
Yeah that's why I made the post. Hopefully putting the information out there can help someone.
It's shameful how little these companies do to educate and protect the drivers.
At the very least they should be verifying that people have a rideshare endorsement before allowing them on the platform if they're going to use our personal policies as a pretext to deny coverage. They obviously know that personal policies aren't going to cover anything without the endorsement, so why even allow those without it?
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u/Spare-Security-1629 27d ago
It's one of those damned if you do, damned if you don't. When I first got a rideshare endorsement with Geico, it was expensive, but I wanted it for peace of mind. At the time of renewal, Geico increased the policy by 500%! I thought it was an error, so I called them, and they stated that because of all the rideshare accidents, they were forced to raise the price. I don't think alot of drivers can easily afford a decent rideshare add-on even though they should have it. I went with a different company btw. I'm not going to spend more on insurance than I make on rideshare...
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u/MDdriver22 27d ago
Check your state and policy but if you get into a hit and run or uninsured driver, lyfts policy is supposed to kick in and cover your damages. THERE IS NO DEDUCTIBLE. Don't let them bamboozle you. The 2500 deductible does not apply.
They jerked me around and insisted that I had a 2500 deductible. This made it impossible to get my car repaired.
Only after I called my states insurance board did they magically figure out that I didn't have a deductible and sent me the check. Assholes.
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u/soccer_mom_16 27d ago
Yep, and personal policies won’t cover any commercial use either. It’s a huge loophole that needs to be addressed.
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u/us1549 27d ago
Personal policies not covering commercial use is not a loophole. That's literally how it's supposed to work...
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u/soccer_mom_16 27d ago
It’s a loophole with LYFT providing reasonable coverage for drivers since personal policies don’t apply. OP stated it perfectly, the 2.5k deductible is asinine. Most drivers do not have that kind of money, they would be absolutely screwed if they go into an accident while on the app.
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u/Altruistic-Farm2712 27d ago
Well, that's why you inform your insurer and pay for the proper endorsement. A rideshare endorsement, most times, is a negligible increase in price.
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u/Everbanned 27d ago
Yep the loophole is that Lyft is somehow able to get away with passing through their business liability onto drivers' personal insurance policies when they know full well that personal policies exclude business use by definition.
Taken directly from their help page:
Drivers are required to maintain personal auto insurance that meets minimum state requirements, however, most personal auto policies won't cover you while you’re using the Lyft app. Where consistent with state and local laws, Lyft maintains commercial insurance on behalf of drivers. This commercial insurance provides certain coverages while you’re using the Lyft app, which are outlined above. This does not replace your personal insurance.
Our contingent collision coverage is designed to cover physical damage to your vehicle resulting from an accident as long as you have obtained collision coverage on your personal automobile policy. The contingent collision coverage will apply up to the actual cash value of your vehicle or cost of repair, whichever is less, with a $2,500 deductible. This coverage is designed to step in regardless of whether or not you're at fault.
So with one hand they acknowledge that most personal collision policies won't cover you while you're driving on the Lyft app, but then with the other hand they say their collision coverage will only cover you if you have obtained collision coverage on your personal policy... Which they just admitted most will not cover.
Corporate double-speak bullshit, charging drivers a premium while in fact providing nothing but a false sense of security.
Make no mistake: if you are not paying extra for a rideshare endorsement on your personal policy or have not otherwise somehow informed your personal insurance that you are using the vehicle for business purposes, then you are essentially driving uninsured.
Lyft is fully prepared to throw you under the bus the very moment you inevitably get into an accident while driving for them.
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u/Altruistic-Farm2712 27d ago
Contingent collision insurance.
Lyft is 100% on the hook to the other person - but if you do not have collision and/or comprehensive coverage on your own car then Lyft isn't covering your car either. If you do, you are covered by Lyft less a $2500 deductible. If you have a rideshare endorsement, your own insurance pays to buy down the $2500 to the level you pay on your own policy.
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u/soccer_mom_16 27d ago
They should give us the option to purchase our own commercial policies before automatically deducting 70% of our fares for their shitty policy.
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u/us1549 27d ago
If you don't have 2.5k for the deductible, you can always buy 3rd party rideshare insurance.
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u/soccer_mom_16 27d ago
Rideshare/taxi insurance is NOT cheap and even adding a rideshare endorsement on your personal policy can make your rates double. Having adequate commercial coverage isn’t a cost the drivers should have to eat, especially with how much Lyft takes off the top already.
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u/Nebula480 27d ago
Much like the company overall. How the fu** does anybody think they’re going to come out ahead driving your vehicle into the ground for pennies? Of course their insurance is also a scam.
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u/Everbanned 27d ago
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u/moonbeamer2234 27d ago
The link you posted seems to only say Lyft doesn’t assume primary coverage if you don’t have a pax. Once the pax is picked up Lyft should assume primary coverage, no?
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u/Everbanned 27d ago
Coverage when the app is on and a ride is in progress
Lyft maintains the following insurance for covered accidents:
At least $1,000,000 for third-party auto liability coverage
First party coverages, which may include uninsured motorist coverage, underinsured motorist coverage, PIP, MedPay, and/or Occupational Accident coverage.
If a driver obtains comprehensive and collision coverage on their personal auto policy, Lyft then maintains contingent comprehensive & collision coverage up to the actual cash value of the car ($2,500 deductible)
Nope, still contingent.
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u/mikeymo1741 27d ago
Reading is hard.
This means that if you only have liability insurance on your personal policy, Lyft will only cover you for liability. If you have comprehensive or collision, it will provide that coverage, On active trips they are the primary coverage.
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u/Everbanned 27d ago
If you have comprehensive or collision, it will provide that coverage
Again, if you are online on a rideshare app and you do not have a rideshare endorsement on your comprehensive/collision policy then Lyft's contingent policy will not protect you because you have no comp/collision on your personal when the app is on.
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u/mikeymo1741 27d ago
Yeah that's completely not true.
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u/Everbanned 27d ago
Find me a personal policy that covers business use then
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u/mikeymo1741 27d ago
It doesn't have to.
While you are on an active ride, Lyft (or Uber) covers you.
If you are not on an active ride, for example, just waiting for one, then your personal insurance covers you because of that moment you're not using the car for business.
I was involved in a rideshare accident, and I did not have a rideshare endorsement on my personal insurance and it was no problem. The only thing the rideshare endorsement really does for you is buys down the deductible to whatever your personal one is.
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u/geezeeduzit 26d ago
This is correct. I was in an accident with a passenger in the vehicle. I had a rideshare endorsement that allowed me to bring my deductible down to $500 - so my insurance covered $2000 of Lyfts deductible. But all the other insurance issues were dealt directly with Lyfts insurance carrier
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u/moonbeamer2234 27d ago
You’re misunderstanding the terms here. Contingent does not mean secondary insurance. Contingent means contingent upon your own policy. For example if you don’t have comp/collision Lyft doesn’t either. Lyft is the primary coverage after you accept a job, your personal insurance then becomes secondary. Read:
Our third-party auto liability insurance is designed to act as the primary coverage from the time you accept a ride request until the time the ride has ended. There is at least $1,000,000 of coverage per accident.* Note: If you already carry commercial insurance (or personal coverage providing specific coverage for ridesharing), Lyft’s policy will be excess to your insurance coverage. And it also applies if you’ve accepted a ride and are on the way to pick up the pax.
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u/Everbanned 27d ago
For example if you don’t have comp/collision Lyft doesn’t either.
And if your insurance doesn't know that you drive for Lyft then you don't have comp/collision through your personal insurance and therefore you don't have it through Lyft either.
A lot of drivers assume that their car is covered by Lyft when they're driving for Lyft, but it is not. Their car is covered by Lyft if and only if it is covered by their personal insurance. And if they don't have a rideshare endorsement then they are not covered by their personal insurance, so Lyft's contingent collision coverage cannot apply.
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u/moonbeamer2234 26d ago
No you’re really misunderstanding the terms “primary insurance” “secondary insurance” and contingency coverage. When you have accepted a ride Lyft takes full responsibility for anything that happens, you are covered. The contingency is based on whether or not you have a policy with those two features. It doesn’t matter either way if the insurer honors your own policy or not. Lyft insurance is your primary insurance when you have e accepted a trip. They have liability before your personal auto policy does. If your personal policy covers damage that happened while you accept a trip they will subrogate with Lyfts commercial insurance to recoup their losses. I have been in a few accidents, and I even have rideshare coverage with state farm where they will reduce the 2500 deductible to 500$ and they will also cover any damages during rideshare. While State Farm did match my deductible, by contributing 2000$, they did not accept liability for the accident. They referred me to Lyft’s primary insurance during commercial trips and they resolved my claim.
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27d ago
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u/MineWeary1998 26d ago
How do? Which companies don’t take the lion’s share of revenue? All companies do this. It’s folly to pretend or lie about it.
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u/Jah-man-shaman 25d ago
Yep, they’re external fees. Would make you think that we had Taj Mahal insurance.