Insurance Coverage Considerations When a Carpool Trip Goes Wrong

Ridesharing services such as Uber and Lyft have reshaped the private transportation market. The increase in carpooling makes getting to where you need to go easier than ever, but not without risks.

One of the biggest issues facing this industry is the type and amount of insurance coverage that rideshare companies offer their drivers. The main question: in the event of an accident, who pays? The answer is not as clear as you might think.

Companies like Uber and Lyft are legally classified as transportation network companies. TNCs do not own any of the vehicles. Rather, they simply facilitate transactions between a hired driver and a passenger through a mobile app. This ownership loophole creates an opportunity for TNCs to deny insurance coverage to their fleets, unlike other transport services such as taxis and limousines.

In 2016, the National Association of Insurance Commissioners adopted recommendations on insurance coverage in this new carpooling economy. He proposed that the simplest solution to the limitations and gaps in coverage in the carpooling market was either for a driver to purchase their own commercial coverage or for a TNC to provide full coverage for the driver during working hours. .

Specifically, the NAIC found that Third Party Liability Coverage, Uninsured / Underinsured Motorist Coverage, Comprehensive and Collision Coverage, and Medical Coverage should all be required and provided by the TNC or the driver personally.


Connecticut adopted its own version of an STN statute in 2018 and did so by separating insurance requirements into two periods. The first period occurs when the driver is logged into the TNC app and is available or waiting to receive a ride request but has not yet confirmed a ride. During this first period, Connecticut law requires automobile liability insurance coverage of at least $ 50,000 for damage due to bodily injury or death of a person; $ 100,000 for damage due to bodily injury or accidental death; $ 25,000 for property damage; and coverage of uninsured and underinsured motorists with proportional limits.

The second period occurs when the driver is actively engaged in a confirmed journey – covering both when a driver is en route to pick up a passenger and when the driver has a passenger in the vehicle. Here, Connecticut requires auto liability insurance coverage of at least $ 1,000,000 for damage due to personal injury, death, or accidental property damage; as well as coverage for uninsured and underinsured motorists.

In the event of an accident, Connecticut allows insurance coverage requirements to be met by an automobile liability policy maintained by a TNC, driver, or a combination of the two. This flexibility enshrined in Connecticut law is protection for drivers and victims.

Despite Connecticut’s seemingly flexible regulations, some would argue that TNCs insurance regulations remain inadequate. By relating the amount and type of coverage to whether a driver has confirmed a trip, a TNC can theoretically transfer significant legal liability to the driver. In other words, in the event of an accident in which the application has not been triggered, the driver – and not the TNC – may be liable.

As evidenced by several recent cases against Uber and Lyft, concerns about the adequacy of insurance coverage in the ridesharing industry continue to grow. Since personal automobile liability insurance policies generally exclude commercial use, the best way for drivers to protect themselves is to obtain and maintain their own commercial automobile liability insurance.

Lawyer John M. Parese is a partner at New Haven-based Buckley Wynne & Parese. He can be reached at 203-776-2278 or jparese@bwplaw.com.


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Justin D. O'Neill