Uber Caught Telling Drivers to Buy Inadequate Insurance

An Uber employee was caught telling would-be drivers to buy the wrong kind of car insurance. To make matters worse, the employee seems to have told prospective Uber recruits to break the law.

At a recent open house for persons interested in driving for Uber X at a Los Angeles car dealership, a reporter for BuzzFeed heard an Uber representative say that its drivers in California do not need to purchase commercial insurance. Instead, they were told that regular car insurance policies would provide adequate coverage.

The biggest problem with that dubious advice is that it is apparently illegal in California and could get drivers into big trouble with the Divisioenhanced-11225-1419230100-2n of Motor Vehicles (DMV). It sounds as if the California DMV and Uber are on a collision course over this matter.

“There’s not a shade of gray on it,” DMV Branch Chief Andrew Conway told BuzzFeed News. “If you use the vehicle for commercial purposes, even occasionally, it has to be registered as commercial.”

That sounds pretty clear cut, yet BuzzFeed reports that Uber is still telling its Uber X drivers they only need personal insurance. To make matters worse, it is apparently offering leasing and car buying programs that encourage drivers to use personal policies to cover their cars.

Uber does give each Uber X driver $1 million in liability protection but only when he or she is actually carrying a passenger. When the driver is trolling around looking for passengers, driving to pick up a fare, or returning from a drop off, he or she isn’t covered.

Uber vs. Insurance Industry: Guess Who Wins

That could put drivers at serious risk because Allstate, GEICO, Progressive, and State Farm, four of the nation’s largest insurance companies, say their personal car insurance policies do not cover ridesharing activities at anytime. BuzzFeed also reports that some drivers have had their policies canceled and claims denied.

It sounds as if insurance companies are about to come down on Uber and its drivers hard. If there is going to be a war between Uber and the Insurance Industry, I have a feeling I know which side will win. Uber drivers will be caught in the crossfire. Read the letter below; a lot of Uber drivers are about to receive it.

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Basically, that means if an Uber driver gets into an accident driving to a fare, medical bills and damage to the car wouldn’t be covered. To make matters worse, there would be no be liability coverage, so a person or his insurance company could sue the driver for everything he owned.

The situation is particularly bad because drivers say that they cannot afford commercial livery insurance, which is required for taxis and limos, under Uber’s current rates. Such coverage costs three to 10 times as much as regular car insurance. It’s available to Uber Black Drivers but not to most Uber drivers.
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Uber drivers are caught in a real Catch 22 when it comes to insurance. They don’t make enough to pay for the insurance they need, and their company refuses to provide a better policy. The state of California has tried to get the insurance industry to develop a policy for rideshare drivers, but no insurance company has apparently taken them up on the offer.

Lyft drivers seem to be a little better off because they have a medical liability policy that covers them during the trolling period when they are looking for passengers. The problem is that it only offers $50,000 worth of liability.

What’s truly bothersome is that Uber and car dealers that lease or sell cars to Uber drivers seem to be encouraging drivers to lie to their insurance companies. One person who isn’t happy about this is Chris Shultz, the deputy commissioner of California’s Department of Insurance.

Shultz accused Uber of trying to “force otherwise law-abiding people to commit insurance fraud.” It sounds as if Uber is about to face the heat in California. Perhaps it is time that Uber devoted some of its resources, such as all the money it is raising through financing, to underwrite some affordable insurance for its drivers. If it does not, this startup could soon be out of business or facing some very nasty lawsuits.

Shultz accused Uber of trying to “force otherwise law-abiding people to commit insurance fraud.” It sounds as if Uber is about to face the heat in California. Perhaps it is time that Uber devoted some of its resources, such as all the money it is raising through financing, to underwrite some affordable insurance for its drivers. If it does not, this startup could soon be out of business or facing some very nasty lawsuits.

BuzzFeed is to be congratulated for exposing Uber’s antics. Hopefully, regulators will take note and crack down on this company before more lives are destroyed by these shenanigans.

AutoInsuranceExperts.com

Oh and one more thing—do not go to an Uber open house. BuzzFeed reported that would-be drivers were promised free pizza for attending. When its reporter went, there was no pizza. Can this company do anything honestly?