Police are warning the public about the insurance-related risks of ridesharing service Uber, according to South Carolina news reports.
Charleston police will hold “sting operations” to warn Uber drivers and possibly fine them after the service launched in Charleston weeks ago, according to The Post and Courier, which also reported that Uber intends to pay those fines for its drivers there.
Uber and other ridesharing services use smartphone apps to connect passengers and drivers. Drivers typically use their personal vehicles to drive passengers, raising questions with authorities over gaps in coverage and public safety.
Uber launched in Greenville, Columbia and Myrtle Beach on July 10. According to other news reports, ridesharing drivers in all of those cities could be stopped by police for warnings and citations.
“Most standard personal auto policies contain exclusions for livery—which generally means ‘driving for hire,’” according to the consumer alert. “Consumers need to read their policies carefully, especially the exclusions section of the policy.”
Under Uber’s auto insurance coverage, $1 million in commercial liability and uninsured/underinsured motorist coverage is in effect during the period from when a driver accepting a rideshare trip to the end of that trip.
A driver’s personal auto insurance policy applies to the period before a rideshare trip begins, typically when the driver has the Uber app open but hasn’t yet accepted a rider. During this period, according to Uber, the company provides 50/100/25 in “back-up coverage coverage/when/if driver’s personal auto insurance declines claim.”
A similar insurance setup also exists at Lyft, another ridesharing company.
Lyft announced changes to its car insurance coverage this month that makes its $1 million commercial policy the primary payer in case of a claim for incidents that occur during a ride. Previously, commercial coverage for that period was secondary, meaning it would only kick in if an insurer denied a claim or a driver’s own policy limits were exhausted.