As one of the newest and fast-growing business trends today, Uber is connecting individuals to drivers in their area at costs less than traditional taxi services. Therefore, Uber may seem like an appealing and profitable employment opportunity. However, before signing up to become an Uber driver, you need to educate yourself on your insurance requirements.
On their website, Uber explains the way their insurance works. As an employed driver, when you are driving your vehicle offline (meaning you are not seeking customers) you are not covered by their insurance. - In other words, you are only covered by your own personal insurance. When the car is offline the company states that: “With Uber you’ll be driving your own car, which means you’ll at least need to have personal auto insurance.”
When the driver is Online (but not on a trip), the car is only covered by Uber’s Contingent Liability Coverage- a lesser coverage than when the car is on a trip. Lastly, when the driver is on a trip, which is considered to be when a customer orders an Uber, the vehicle and passengers are covered by Uber’s Commercial Insurance.
Unfortunately, Uber’s explanation of insurance fails to inform prospective drivers that in most states, commercial insurance is a requirement. In the state of Massachusetts, if you have a personal auto policy, there will be no coverage offered for anyone injured while the insured vehicle is being used as a “public or livery conveyance.” - Even when you are “offline” you are still operating a vehicle that is used to perform a paid service, therefore commercial insurance is required.
Most Massachusetts insurance companies have refused to pay any claims for Uber drivers when they have gotten into accidents on the job with only personal insurance. Also, if discovered to be an employed Uber driver without the necessary commercial insurance, most companies will cancel the drivers’ personal insurance policies.
If you’re considering becoming an Uber driver, do your research and check with your insurance representative to be sure that you will be properly covered at all times when behind the wheel.