Dec 2014

What Happens if Car Sharing Drivers Cause Irvine Accidents?

Car sharing services like Uber and Lyft have become a very popular way for people to get around Los Angeles, Irvine, Santa Ana, Riverside and surrounding areas. These services can provide income to drivers and can provide a convenient and affordable means of transportation for passengers. Unfortunately, however, there are some significant risks associated with car sharing. 

In most cases when an accident happens, victims can take legal action against a negligent driver with the help of a personal injury lawyer. This is true even if the victim is a passenger in his friend’s car at the time of the incident. Insurance companies will step in and pay legal bills and cover losses when a lawsuit is filed or claim is made, because individual drivers do not typically have enough money to pay for damages. However, when the driver is operating a car-sharing service, complicated questions regarding liability can arise and insurers may not provide coverage for accident losses.

Car Sharing Services Create Liability Concerns

Forbes addressed the possible parties who could be liable in situations where a driver participating in a car-sharing service causes a collision. According to the article, “the first- and perhaps only- recourse is the driver.”

Car sharing services like Uber and Lyft have strict terms-of-service agreements that passengers have to sign that aim to shield the companies from becoming personally liable when drivers cause accidents. Further, arguments have been made that these companies are prevented from being held personally liable even in situations where a third party, like a pedestrian on the street, is hit by a driver participating in car-sharing. For example, the Communications Decency Act could protect companies from liability because they only share information about drivers and do not employ the drivers or become responsible for their actions.

If the companies are not to blame, then victims face a big problem if the driver has insufficient insurance coverage or no coverage at all. This can happen far too often, since insurance companies are reluctant to cover people who use their personal vehicles for this type of commercial purpose.

Leaked documents from Geico were recently reported on by the SF Gate. These documents show the hard line that Geico has taken when it comes to providing insurance coverage for car-sharing. The documents instruct staff to “group reject” policies of any customers involved in Uber, Lyft or similar services and they have a script for staff members to use to inform policyholders that they can either get insurance elsewhere or prove they no longer participate in car sharing. State Farm has also said it does not cover car sharing, and a spokeswoman for the Property Casualty Association of America made a blanket statement that a “private passenger auto policy isn’t intended to cover livery services.” If this is true, since this type of behavior is a “material change in the nature of the risk being insured…. most states would allow companies to cancel coverage in those situations.”

If a driver cannot obtain insurance coverage and the car sharing service is not responsible, victims will face complicated legal issues when they seek compensation after an accident with a driver who offered car sharing.

If you’ve been injured, or you lost a loved one, contact the Law Offices of Daniel C. Carlton at (949) 757-0707 to speak with a personal injury attorney in Irvine, CA.  Serving Los Angeles, Irvine, Santa Ana, Riverside and surrounding areas.