Bob overheard his daughter describing a watch she really wanted to a friend on the phone. She mentioned that she had dropped hints before her recent birthday to her Mom to no avail. Her birthday came and went and no watch.
Bob remembered a watch he had really wanted when he was in school that he too did not get. He was a little sad. He thought, “I’m going to figure out a way to earn some extra money to get that watch for my little girl”.
The next day he saw an article in The Daytona Beach News-Journal (article here) about the possibility of an alternative taxicab company called Uber coming to the Daytona Beach area. Uber was looking for drivers with a decent car who wanted to earn some extra money. Basically, Uber connects passengers seeking alternatives to traditional taxicabs with drivers who use their own vehicles to provide rides.
Bob contacted Uber online, filled out all the forms and pretty soon he was getting notifications on his phone that passengers were available for him to pick up.
Bob confirmed his availability to pick up the passenger. He drove to the passenger’s hotel, took the passenger to the airport and collected his fare.
“Wow”, Bob thought. “I can’t believe this. If this keeps up, I may quit my day job”. Bob picked up four more fares that day and looked forward to the weekend when he would have more time to drive. He only needed $200 more to get that watch for his little girl.
Saturday arrived and Bob was ready early. He had a 6AM pickup at a hotel for a guest who had to be at the airport for his 7AM flight. Bob met his passenger right on time. The passenger was getting nervous now. He was not sure he was going to make the flight. He told Bob “There’s an extra $20 for you, if you get me to the airport by 6:30”. “Yes Sir”, Bob said.
Bob put the pedal to the medal. He was making record time when he failed to see the lady in front of him slow to make a turn. Bob plowed right into her.
Bob staggered out of his car to check on the lady he hit. Her car was a disaster. When he looked in the front seat, he could see she was conscious, but she was moaning in pain. Bob dialed 9-1-1 right away. Help was on the way.
Bob shuffled back to his vehicle and found his passenger bleeding from the head where he had hit the door glass. He must have hit it hard because the glass was broken. He could see blood on the glass.
The police came. They called for an ambulance who took the lady in pain away. They had to call another one for Bob’s passenger. He was not going to make his flight. The police officer was nice enough, but Bob still got a ticket for failure to have vehicle under control.
As the tow truck driver hooked up his vehicle to haul it away, he called his wife to come get him. On the way home, he called his insurance company and reported the claim.
The next day the insurance company adjuster called and told Bob that he had not been able to get to speak with the lady he ran into because she was still in the hospital in ICU. It appeared she was hurt badly. The adjuster was able to speak to Bob’s passenger.
The passenger told the adjuster that he hired Bob to take him to the airport when the accident occurred. The adjuster asked Bob if that was correct. Bob said, “Yes, I just started doing that to make some extra money”. The adjuster said he would get back with Bob soon.
Two days later Bob got home from his day job and opened the mail. He opened a letter from his insurance company which read:
After a detailed review of your policy and your recent accident details, we regret to inform you that we will not be
making any payment for the injuries to the lady you hit, the passenger in your vehicle. Nor will we make any payment
for damages to your car or to the car of the lady you hit. We refer to the policy exclusion that reads, in part- “No
coverage for your liability for the ownership or operation of a public or livery conveyance. This exclusion does not
apply to share-the-expense car pool”.
“I don’t think my little girl is going to get that watch”, Bob sighed.
I don’t think so either Bob.
Many people will do exactly what Bob did. He changed the use of his vehicle, but did not contact his insurance agent. This is a big deal and it happens all the time. People make all kinds of changes in their lives, not knowing what the insurance
consequences are.
Most people think (wrongly) “I have paid my premium” and don’t concern themselves with what they have paid for.
“What, my policy doesn’t cover EVERYTHING”?
It does not.
Every personal auto policy has the above exclusion in it. Basically, this means if you charge a fee for riding in your vehicle, then no coverage applies.
The News-Journal article also mentions that Uber provides insurance. I went to Uber’s website and was dismayed to find a statement that you don’t need any “special insurance” to drive for them. They said “No. Your personal insurance policy is all you need”. Now you know from the above, that is not accurate. Maybe they won’t make you have coverage, but they shouldn’t say you don’t need “special coverage”.
Uber also says they provide coverage for you while you are using your vehicle transporting their fares. Really? Have you read their policy? What coverage do you have? Maybe you do have coverage, but when someone else controls your coverage, you are at their mercy (or their policy’s mercy).
In reality, to properly protect themselves, the drivers will have to buy a business auto policy rated for carrying passengers. This will be substantially more expensive, but you’ll be glad you have it should you ever have a claim.
There is nothing wrong with the service provided by Uber. It sounds like it may work very well. Just make sure you investigate what coverage you will need before you need it.