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How will No Fault PIP insurance work for Uber users?

November 6, 2014 by Steven M. Gursten

What No Fault protections do you have if you’re in an Uber car and do not have your own auto insurance?

Yesterday, I wrote about some of the problems I see with Uber’s new “insurance gap” coverage from the tort (or bodily injury side). That is, how this new insurance coverage will affect someone who is hit by an Uber driver looking for a ride.

I also wrote about  someone who is injured in an Uber-operated vehicle when the Uber driver is involved or causes a car accident. And I explained why Uber’s blog post that “most personal auto insurance will provide coverage…[d]uring the time that a ridesharing partner is available but between trips” just isn’t going to be true here in Michigan (and I have a strong hunch in most other states as well).

Today I’ll be focusing on the first-party or No Fault insurance side of the law as it applies to Uber.  As Michigan is a No Fault state, the first-party case covers what No Fault insurance benefits you will receive if you’re hurt in a car accident. It’s very different from the tort or third-party side that I covered yesterday.  The No Fault PIP benefits under Michigan law include medical bills and medical care, wage loss, replacement services, medical mileage, and depending on the severity of the injury, attendant care nursing services. Most attorneys and insurance claims adjusters refer to these first-party benefits as your PIP (personal injury protection) benefits or just as No Fault benefits.

Significantly, for Michigan residents who are using Uber in Detroit, Grand Rapids, Lansing or anywhere else in the state, and for its Michigan-based Uber drivers, Uber’s “insurance gap” coverage discussion in its March 14, 2014 blog post makes no mention of No Fault insurance coverage. In the blog post that was updated on July 22, 2014, however, in the paragraph before its “insurance gap” coverage discussion, I did find this where Uber does explain:

  • “No fault coverage (e.g. Personal Injury Protection) is provided in certain states at similar levels as limos and taxis in those cities.”

Under Michigan law, a “limo carrier of passengers,” i.e., a taxi or limousine driver, must have “Personal protection insurance … as required by” Michigan’s No Fault law. (MCL 257.1913(2)(c))

Although one might presume Uber’s statement about No Fault coverage applies to its “insurance gap” coverage, the ride-sharing service did not specifically say so in either of its blogs describing the extent of its “insurance gap” coverage. Hopefully, Uber will clarify its position on this important point.

If Uber’s “insurance gap” coverage doesn’t include Michigan No Fault coverage, then Uber drivers, as well as pedestrians, bicyclists and uninsured passengers in other vehicles will be put at substantial risk.

Without “insurance gap” coverage that includes No Fault protection, Uber drivers who are injured in a car accident while “on duty” (in between fares and looking for Uber riders) could be disqualified from collecting No Fault benefits if their personal No Fault auto insurance policy includes a “commercial use” exclusion.

Director Ann Flood of the Michigan Department of Insurance and Financial Services (DIFS) addressed this point in a recent press release warning prospective Uber drivers (and drivers for other app-based ride-sharing services) to double-check the limits of their personal auto insurance coverage:

“Most individual insurance policies purchased for personal vehicles have exceptions that exclude coverage for commercial-type activities such as transporting passengers for hire. Drivers should contact their insurance agent to determine if their policy provides sufficient coverage before driving for a TNC. It may be necessary to purchase a commercial policy to cover TNC activities.”

Significantly, a “commercial use” exclusion in the Uber driver’s personal auto insurance policy could also leave injured pedestrians, bicyclists and uninsured passengers in other vehicles without immediate access to No Fault benefits.

Generally, auto accident victims in that position (assuming they’re not covered by their own No Fault policy or the policy of a spouse or resident relative) would seek No Fault benefits from the owner of the car – in this case, the owner of the Uber driver’s vehicle.

However, if a “commercial use” exclusion precludes No Fault coverage under the Uber driver’s personal auto insurance policy, then they will have to turn to the Michigan “Assigned Claims Plan,” which is administered by the Michigan Auto Insurance Placement Facility (MAIPF). To learn more about applying for No Fault benefits through the “Assigned Claims Plan” and MAIPF, take a look at our post, “Assigned Claims Facility now called the Michigan Automobile Insurance Placement Facility (MAIPF).”

Tomorrow, I’ll discuss the different aspects of Uber’s commercial liability coverage for on-duty Uber drivers when they’re transporting a ride/fare/passenger.

Related information:

Are you Uber safe With Uber’s auto insurance coverage?

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