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Lyft and Uber Driver Insurance Requirements for Michigan

December 22, 2016 by Steven M. Gursten

We now have more clarity on Lyft and Uber driver insurance requirements for rideshare drivers and passengers injured in car accidents in Michigan

Uber Insurance & Lyft Insurance Requirements

On December 21, 2016, Gov. Rick Snyder signed three bills into law that overhauled Lyft and Uber driver insurance requirements in Michigan. We now have clarity on our Michigan No-Fault car insurance laws as they pertain to app-based, ridesharing services like Uber and Lyft regarding protections to the passengers  of “transportation network company” vehicles and to the car accident victims injured when accidents inevitably do occur involving those vehicles.

Here are the highlights of the Lyft and Uber driver insurance requirements that these new laws – Michigan House Bills 4637, 4639 and 4640 (Public Acts 345-347 of 2016) addressed for rideshare drivers:

  • Lyft and Uber driver insurance requirements that a “transportation network company driver” must have in effect while on-duty: The Lyft and Uber driver insurance requirements for Michigan is to have a minimum of $1 million in “[r]esidual third party automobile liability insurance” for bodily injury and property damage for when he is transporting passengers. When the rideshare driver is just on-duty, i.e., “logged on” to the “transportation network company’s digital network,” then the required minimum is $50,000/$100,000 for personal injury liability and $25,000 for property damage liability. In both scenarios, the driver must also be covered for No Fault PIP and proportion protection insurance (PPI).
  • Rideshare driver insurance exclusions in personal car insurance policies for Lyft and Uber-type use of vehicle: Insurance companies can write their personal auto policies in such a way that if their insured uses his or her personal vehicle to drive for Uber, Lyft or another “transportation network company” and is injured in a car accident while doing so, then all insurance coverage that would have otherwise been provided under the car insurance policy is excluded, i.e., unavailable.
  • Insurer of the personal vehicle being used by a “transportation network company driver” providing No Fault benefits to a passenger injured in an automobile accident: The passenger of a “transportation network company driver” who is injured in a motor vehicle while a passenger in the driver’s car collects Michigan No Fault benefits (such as medical-expense reimbursement and wage loss benefits) from the driver’s auto insurer only if the passenger has no other source of Michigan No Fault benefits, e.g., she doesn’t have her own policy, nor does her spouse or a resident relative.

What’s in enrolled Michigan House Bill 4637

Here’s what enrolled House Bill 4637, which was signed into law on December 21, 2016, by Gov. Snyder, as Public Act 345 of 2016, says about the Lyft and Uber driver insurance requirements for a rideshare driver – i.e., a driver for a “transportation network company”:

  • A “primary automobile insurance” policy “shall” be “maintain[ed]” (by either the driver, the company or both) that recognizes that the transportation network company driver uses the vehicle as a transportation network company driver or otherwise uses a vehicle to transport passengers for compensation and covers the [Uber or Uber-type] rideshare driver while he or she is logged on to the transportation network company’s digital network or while he or she is engaged in a prearranged ride.” (Page 7 (Sec. 23(1) and (4)) of the House-enrolled version of HB 4637.
  • The Lyft and Uber driver insurance requirements for coverage for when a rideshare driver is “logged on to the transportation network company’s digital network,” but not transporting passengers, includes: “Residual third party automobile liability insurance … in the amount of at least $50,000.00 per person for death or bodily injury, $100,000.00 per incident for death or bodily injury, and $25,000.00 for property damage”; No Fault “personal protection insurance” (PIP); and, “property protection insurance” (PPI). (Page 7 (Sec. 23(2)) of the House-enrolled version of HB 4637)
  • The Lyft and Uber driver insurance requirements for when a rideshare driver is transporting passengers, i.e., when “a transportation network company driver is engaged in a transportation network company prearranged ride,” includes: “Residual third party automobile liability insurance with a minimum combined single limit of $1,000,000.00 for all bodily injury or property damage”; No Fault “personal protection insurance” (PIP); and, “property protection insurance” (PPI). (Page 7 (Sec. 23(3)) of the House-enrolled version of HB 4637)

What’s in enrolled Michigan House Bill 4639?

Here’s what enrolled House Bill 4639, which was signed into law on December 21, 2016, by Gov. Snyder, as Public Act 346 of 2016, says about the types of Lyft and Uber driver insurance exclusions that car insurance companies can insert in their personal auto policies for when the insured wants to use the covered vehicle in his capacity as a “transportation network company driver”:

  • An auto insurance company “that issues an insurance policy insuring a personal vehicle” that is used by a Lyft, Uber or rideshare driver “may exclude all coverage afforded under the policy for any loss or injury that occurs while a transportation network company driver [while driving the covered vehicle] is logged on to a transportation network company’s digital network or while [he or she] is providing a prearranged ride,” i.e., transporting passengers. (Page 2 (Sec. 3017(1)) of the House-enrolled version of HB 4639)
  • The Lyft and Uber driver insurance  requirements for car insurance coverages that may be excluded include: residual liability; Michigan No Fault “personal protection insurance” (PIP); and, “property protection insurance” (PPI); “uninsured and underinsured motorist coverage”; and, “comprehensive” and “collision” coverage. (Page 2 (Sec. 3017(1)(a-e)) of the House-enrolled version of HB 4639)

What’s in enrolled Michigan House Bill 4640?

Here’s what enrolled House Bill 4640, which was signed into law on December 21, 2016, by Gov. Snyder, as Public Act 347 of 2016, says about the source of No Fault benefit requirements for Uber or Uber-type passengers, i.e., passengers of transportation network company drivers:

  • A “person” who suffers “accidental bodily injury while … [a] passenger” of an Uber or Uber-type “motor vehicle” (i.e., “a transportation network company vehicle”) “shall” NOT “receive the [No Fault] personal protection insurance [PIP] benefits to which the person is entitled from the insurer of the motor vehicle … unless the passenger is not entitled to personal protection insurance benefits under any other policy …” (Page 2 of the House-concurred version of HB 4640) (Page 2 (Sec. 3114(2)(g)) of the House-enrolled version of HB 4640)

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