Rideshare services like Uber and Lyft are a huge convenience for those who can’t drive or don’t have a car. And they’re especially convenient when enjoying the nightlife in Seaside Heights or Point Pleasant.
But when you’re involved in a crash with a rideshare driver, then convenience turns into confusion fast. Figuring out who pays for your medical bills often becomes a headache with New Jersey’s complicated system for rideshare insurance.
How rideshare insurance coverage works in New Jersey
Rideshare companies don’t operate like regular car insurance. Instead, they use a three-tiered system that changes depending on the driver’s status or actions during the accident.
Basically, the system determines which insurance policy applies to your claim and how much compensation you can recover based on which tier the rideshare driver falls under.
First tier: When the driver’s app is offline
The first tier or Period 0 covers the time when a rideshare driver has their app completely turned off. During this period, the driver operates as a regular motorist, so only the personal auto coverage policy of the rideshare driver will apply.
Uber and Lyft provide no coverage during this time. If you get hit by an off-duty rideshare driver, you’ll need to file a claim against their personal insurance policy, which may have lower limits than you’d find with rideshare coverage.
Second tier: When the driver waits for a ride request
Period 1 or the second tier begins when the driver logs into the app and waits for a passenger request. Under this period, rideshare companies provide:
- $50,000 limited liability coverage each person for bodily injury
- $100,000 limited liability coverage per accident for death or bodily injury
- $25,000 limited liability coverage for property damage
These amounts fall below what Uber and Lyft offer during active rides. The limited coverage during this waiting period often creates disputes about when exactly an accident occurred, as insurers try to minimize their payout obligations.
Third tier: When the driver has accepted a ride
Periods 2 and 3 offer the most comprehensive coverage. Period 2 starts when a driver takes on a ride request and continues until the passenger gets in the car. Period 3 covers the actual trip.
During both periods, rideshare companies provide up to $1 million in liability coverage plus uninsured and underinsured motorist protection.
Getting the compensation you deserve
The three-tiered system isn’t just confusing for regular people but can give insurance companies multiple opportunities to deny or delay your claim. Rideshare accident cases often involve longer investigation periods, and companies often argue that the crash happened during Period 1 to reduce what they owe, even if the evidence says otherwise.
Working with an experienced personal injury attorney can help you build a stronger case and protect your rights to fair compensation.