Uber is a new service taking the country by storm. Uber connects riders to drivers through an app on your smart phone, making cities more accessible. Uber is currently operating in 70 cities throughout the US and even more globally. Uber may seem like a great idea, especially for drivers who want to earn extra income, but drivers need to beware of insurance limitations and gaps in coverage.
Drivers can sign up to become an Uber driver if you are…
- At least 23 years old, with a personal license and personal auto insurance.
- Your vehicle is any mid-size or full-size 4-door vehicle, in excellent condition.
The problem is most personal auto insurance policies do NOT cover livery service. If you receive compensation for transporting someone from point A to point B it is considered livery service and is excluded from personal auto coverage.
Private Passenger Auto
A private passenger auto is a four-wheel motor vehicle, other than a truck type, owned or leased under contract for a continuous period of at least six months, and:
- Not used as a public or livery conveyance for passengers,
- Not rented to others.
- Vehicles used commercially, including but not limited to livery (for hire), rented to others, or delivery.
This is a sample auto insurance policy but insurance contracts have defined private passenger automobiles and most have excluded vehicles used commercially and for hire. Uber driver’s need to obtain a special insurance policy, to be fully covered for this type of service.
Virginia DMV Orders Uber to Stop Operating
In June 2014, Virginia’s Department of Motor Vehicles sent cease and desist orders to Lyft and Uber telling the two ride services that they must stop operating in violation of state law or face fines against their part-time drivers.
The DMV had already issued civil penalties against the company in April — $26,000 for Uber and $9,000 for Lyft – for trips that their drivers provided in Virginia despite warnings by the state agency that Virginia law does not allow their business model.
The Andrew Agency
Uber drivers can contact The Andrew Agency to discuss their insurance options. (804) 320-2886 or [email protected].