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There’s a new trend for getting around town in many big cities in Michigan: ride-share companies. These companies, like Uber and Lyft, claim to be better, faster, and cheaper than renting a taxi. But you could be taking a big risk if your driver gets in an accident.
The ride-share companies offer riders the ability to download an app on their smart phones. Then they request a ride from local drivers who are near by. The companies market themselves as a safe alternative to drunk driving.
But what would happen if you got into an accident while inside a ride-share vehicle? Taxi and limousine companies in Michigan are required to pay for commercial no-fault insurance that covers both driver and passengers in the event of an accident. They are also required to have annual inspections on all their vehicles.
Ride-share companies don’t have those same requirements. The vehicles are usually not driven by people with chauffeur’s licenses, and are not subject to inspection. There could be no difference between a ride-share car and your neighbor’s car as far as safety.
More importantly, it isn’t clear whether ride-share drivers are covered by the right kind of no-fault auto insurance. Both Uber and Lyft claim $1 million coverage, but some question whether it would apply when private vehicles owners take passengers on board for money.
“If you’re using it for business purposes and you haven’t told your insurance company, that’s misrepresentation. Because obviously you pay insurance based on the amount of risk you have,”
says Lori Conarton, communications director for the Insurance Institute of Michigan (IIM). If a driver has made that misrepresentation and gets into an accident, the insurance company could deny coverage to everyone in the vehicle.
If you have no-fault insurance on another car at the time of the accident, you will most likely be covered. You can be even safer by adding uninsured/underinsured motorist coverage, which will protect you if the driver hasn’t done his or her job. But if you are unsure about your coverage, only use licensed commercial transportation companies. Their insurance and inspection requirements will cover you even if your own insurance doesn’t.
It can be tempting to save a few dollars or try out a new, trendy service. But when it comes to ride-share companies, you could be risking your health should you get into an accident while in their vehicles. Know the risks and do your research before downloading any ride-share apps.
If you or someone you love was injured while riding in a commercial vehicle, contact the no-fault experts at Christensen Law in Southfield, Michigan. David Christensen and his team can help you sort through the insurance companies’ red tape and get you the medical coverage you need.