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Many people prefer to use Uber and Lyft instead of taxis in big cities and even in smaller suburbs. The drivers who work for these companies are independent contractors. They use their own cars to transport people. The fares and pickup arrangements are taken care of through the Lyft and Uber apps.

Passengers ask for a pick-up. The app will send them a driver to the location that they are at at the fare that they desire. They reach the desired destination and let the app take care of the rest in terms of payment and billing.

Car accidents are bound to happen even in Lyft or Uber. This raises a whole new set of questions and issues including who should be held responsible for the accidents and whose insurance policy would apply in such a situation, as per Personal Injury Lawyer in St John’s.

Uber and Lyft drivers work as independent contractors

You generally can’t sue Uber or Lyft if you’re ever involved in an accident while riding in one of these cars. The reason is because the drivers aren’t directly employed by either company. Uber and Lyft tend to treat these drivers as independent contractors from the legal standpoint.

Companies are vicariously responsible for the wrongdoings of the people who they directly employ. They aren’t legally responsible for anything that the people who they employ as independent contractors may do wrong. Uber and Lyft justify this because the drivers use their own cars and set their own schedules.

So you may have a difficult time suing either company if you ever get into an accident. That said, you can always file a claim through their insurance companies.

What you should know about Uber and Lyft car insurance policies

Anyone who works for Uber or Lyft has to have car insurance. The companies will supplement this individual auto insurance coverage with their own coverage – this is to protect the drivers if they were to have an accident while working.

Uber or Lyft’s extra coverage is important since individual car insurance policies usually don’t honor claims for accidents that occurred when the policyholder was working for hire. There is a catch though. Uber or Lyft’s coverage will pay only if the driver’s car insurance company doesn’t. That is the driver’s car insurance policy is supposed to pay first before Uber or Lyft coverage will step in.

Some drivers tend to hedge this by buying their own ride-sharing endorsements to their car insurance policies. These will pay if passengers ever file a claim against the driver’s insurance coverage.

Another catch is that the driver’s insurance company will cancel his or her auto insurance policy if he or she submits a claim through the company and doesn’t have an endorsement. The company will use the fraud argument to justify its actions.

What happens when ride-sharing companies provide coverage?

Ride-sharing companies follow a four-tiered approach when it comes to protecting their drivers.

1. Period 0 – the driver isn’t officially in driver mode with either Uber or Lyft. Hence, he or she doesn’t have the app. If the driver gets into a car accident during this phase, his or her insurance company is responsible for paying any claims that arise from accidents while on the job.
2. Period 1 – the driver has the app but is waiting for a match. If he or she gets into an accident, his or her insurance company would have to pay. Uber or Lyft’s insurance company would pay only if his or her insurance company refused.
Period 2 – the driver is going to pick the passenger up. The rules in period one also applies to this period.
3. Period 3 – the driver is transporting the passenger to the appropriate location. The driver is no longer liable once he or she drops the passenger off. The rules that applied in period one also applies in this situation.

Damages that passengers can recover

You can get compensation for general and special damages. Special damages will refer to bodily injury or property damage. General damages refer to pain and suffering and other types of intangible damages.