Wednesday, August 2, 2017

Just A Word About Uber

I think the concept of Uber is a great one, and it seems so simple too. All people have to do to make money is sign up for the Uber app and then pick up people who need rides. The driver and passenger agree on a price, and the whole thing is done on their smartphones. It is truly a great idea, but it is not as simple as it seems. My goal here is not to talk anyone out of Uber. My goal is to help drivers understand exactly what is going on with Uber and the risks you assume the moment you make yourself available for an Uber client.

Read this before we get started:

https://www.consumeraffairs.com/news/driving-for-uber-or-lyft-check-your-insurance-coverage-041817.html

What does this mean? It means that being a driver for Uber is not just a matter of getting the app and giving people rides. It means that, while Uber uses its television commercials to sell its version of the American dream, it is conveniently leaving out the fact that your personal auto insurance is not going to cover you if something happens while you have a passenger.

Uber offers a $1 million liability policy for all drivers, but even Consumer Affairs leaves out a pretty important detail about that policy. The Uber policy only covers medical expenses for your passenger if you get in an accident while driving for Uber. Any injuries to you, any damage to your car, and any injuries or damage to other people or property are still your responsibility. In most cases, your personal insurance will not cover any of that damage and none of those injuries. In other words, if you get in an accident while driving for Uber, you will probably be personally responsible for thousands of dollars in damages and medical bills.

I know that it sounds really unlikely that Uber would leave out these not-so-insignificant details when they make their oh so happy and uplifting commercials, but they do. This is not something Uber drivers can gloss over or just laugh off. Even a minor fender bender while driving for Uber could cost you a lot of money when your personal insurance refuses to cover you.

Why won't your personal insurance cover you? When you drive for Uber, you are taking on a commercial venture. Your personal auto insurance does not cover you for commercial ventures such as carrying passengers for pay, or delivering packages for a fee. Once you make yourself available for Uber passengers or place that package in your car, you are no longer covered by your personal auto insurance.

There are some solutions Uber drivers can use to make sure they don't go bankrupt driving for Uber. You can get a commercial driver's license for yourself, and then get commercial auto insurance for your vehicle. You can also call your insurance company and ask about ridesharing insurance. This is a new idea, so your carrier might not have it yet. As the Consumer Affairs article suggests, you can also create an LLC for your Uber driving and protect yourself from personal liability. That is not the cleanest or least expensive method, but it would work.

THIS IS NOT LEGAL ADVICE. I recommend that you talk to an insurance expert about this and get the whole thing straightened out before you take on your first Uber passenger. If you ignore all of this, then you are a financial time bomb driving around waiting to go broke being a part of the great service that is Uber.

You've been warned.

George N Root III is a Lockport resident who likes to warn people about stuff. Follow him on Twitter @georgenroot3, or send him a message at georgenroot3@gmail.com.

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