Hurt in an Uber or Lyft Crash? Ohio's New Rideshare Insurance Law (H.B. 237)

Published March 22, 2016 · New Laws

Tomorrow, March 23, 2016, Ohio's first law regulating insurance for Uber, Lyft and similar services takes effect. Am.Sub.H.B. 237, passed by the 131st General Assembly, creates a new Chapter 3942 of the Revised Code governing "transportation network companies," the statute's term for app-based ride services. For passengers, for people hit by rideshare drivers, and for the drivers themselves, it answers a question that has been murky since these services arrived in Dayton: whose insurance pays when a rideshare car crashes?

When I wrote about this in the summer of 2014, the honest answer was "it depends on the company's voluntary policy and how hard the driver's personal insurer fights." Starting tomorrow, the minimums are set by statute.

The three "periods" that decide which policy applies

The new law borrows a structure the industry already uses. A rideshare driver's day is divided into periods, and the coverage required depends on which period the crash falls in.

App off. The driver is a private motorist. Only the driver's personal auto policy applies, subject to Ohio's ordinary minimum limits of $25,000 per person, $50,000 per accident and $25,000 property damage, which I discussed when those limits were raised in December 2013.

App on, no ride accepted. Under R.C. 3942.02(A)(2)(a), while the driver is logged on to the network and available to accept requests but not yet engaged in a ride, primary coverage must be at least $50,000 per person and $100,000 per accident for bodily injury or death, and $25,000 for property damage.

Engaged in a ride. Under R.C. 3942.02(A)(2)(b), from the moment the driver accepts a ride request until the passenger exits, primary coverage must be at least $1,000,000 for bodily injury, death and property damage combined, per accident.

The statute lets these requirements be met by the driver's own policy, the company's policy, or a combination. In practice, it is the company's policy. And under R.C. 3942.02(B)(1), if the driver's personal insurance does not provide the required coverage, the company's insurer must step in "beginning with the first dollar of the claim" and must defend the claim. Division (B)(2) adds that the company's policy cannot require the driver's personal insurer to deny the claim first. That closes a gap that used to leave injured people waiting months while two insurers pointed at each other.

The bad news: the driver's personal policy can exclude everything

R.C. 3942.03(A) is the trade-off the insurance industry negotiated. It allows an insurer issuing a personal auto policy to exclude "any and all coverage" for any loss that occurs while the driver is logged on to the network or providing rides. The statute lists what may be excluded, and it is the entire policy: liability coverage, uninsured and underinsured motorist coverage, medical payments, comprehensive and collision.

Division (C)(1) goes further and says nothing in the chapter requires a personal policy to cover rideshare activity at all. Expect every major personal auto insurer in Ohio to add this exclusion at the next renewal if it has not already.

Why does this matter to an injured person? Because the driver's personal policy is often the policy with the most generous terms, and because it is the one the driver (and the driver's own passengers in a non-rideshare context) rely on. After tomorrow, during rideshare activity it may be worth nothing.

What this means for each person in the crash

You were a passenger in an Uber or Lyft. The $1,000,000 policy applies to you whether your driver or another driver caused the crash. If another driver was at fault and underinsured, the rideshare policy's uninsured/underinsured coverage is also in play, although the statute does not set a required UM/UIM amount, so the terms of the company's policy control. Serious injuries in these cases can be fully compensated in a way that is often impossible against a private driver with state-minimum limits.

You were hit by a rideshare driver. The first question is which period the driver was in. If a ride was underway, you have the $1,000,000 policy. If the app was on but no ride had been accepted, you have at least $50,000 per person, which is double the state minimum but can still be far short of a serious injury. If the app was off, you are dealing with a private driver and an ordinary personal policy, possibly a minimum-limits one. In the last two situations, your own UM/UIM coverage, and the setoff math I explained in January, can determine your recovery.

You are a rideshare driver who was hurt. If another driver caused the crash while you were logged on, your personal policy's UM/UIM coverage may be excluded, so the rideshare company's UM/UIM coverage (if any) and the at-fault driver's policy are what remain. Drivers should ask their insurer now whether a rideshare endorsement is available; R.C. 3942.03(C)(2) expressly allows insurers to offer one.

Proving which period applied

Because the coverage tiers depend on the driver's app status at the moment of impact, that status is now a key fact in every rideshare case. The new law helps. R.C. 3942.02(D) requires the driver to disclose at the scene whether the app was on or a ride was in progress, and R.C. 3942.03(D) requires the company and its insurer to exchange the precise log-on and log-off times for the twelve hours before and after the crash with the other parties and insurers. We request those records immediately in every rideshare case, along with the trip data the company holds.

What this means for you

H.B. 237 is, on balance, good news for injured people: a mandatory $1,000,000 policy during rides, a clear duty on the company's insurer to pay from the first dollar, and a statutory right to the app data that proves which coverage applies. The cost is the near-certain exclusion of rideshare activity from personal policies, which makes the period analysis unforgiving.

If you were hurt in a crash involving a rideshare vehicle in the Dayton area, do not assume the adjuster has correctly identified the applicable policy. Our car accident practice handles the insurance analysis in these cases, and our UM/UIM page explains what your own policy may add.