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Ride-sharing services can lead to "murky" insurance issues in accidents

Ride-share accidents could provide grounds for allegations of bad faith insurance denials.
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    February 28, 2014 /24-7PressRelease/ -- Ride-sharing services can lead to "murky" insurance issues in accidents

Article provided by O'Connor, O'Connor, Bresee & First, P.C.
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It seems like a great deal: download an app, make a request and get a ride! Although ride-sharing is gaining popularity across the country, critics continue to voice concerns about the safety of passengers. Aside from the fact that drivers generally do not receive additional training prior to partaking in the service, issues about insurance coverage in the event of a car accident are also under scrutiny.

A recent article in the Los Angeles Times addressed the issue, noting accidents involving ride-share vehicles can lead to a variety of legal and insurance problems. Since ride-sharing is still a fairly novel concept, there is little precedent to help guide current users to the dangers and potential lack of proper insurance coverage for those who use the system.

More on ride-sharing

Ride-sharing can be loosely compared to carpooling. People looking for a ride can use an app to find available drivers who will transport them to their destination. Some popular ride-share apps include Uber, SideCar and Lyft. To use these and similar services, a smartphone user would download the app, input a credit card and request a ride. After the ride is complete, the user can leave a suggested donation to the driver.

A report by NPR focused on the motivation behind the new trend. Instead of saving money or living a green lifestyle, many users partake in ride-sharing to meet new people. The services tend to do best in larger cities, like New York. The report also discussed some of the positive aspects of ride-sharing. Primarily, since users do not need to purchase a car they can save on the cost of a car, including the cost of insurance.

Although these services can lead to savings, it is important for those who participate to be aware that there is little to no regulation. Ride-sharing is not currently treated like a taxi service; drivers are not required to carry commercial insurance policies to cover their passengers. Whether or not the service should fall within these while critics argue since the service is transporting people in exchange for money, taxi regulations should apply. The debate has entered the courts in New York City. Recently, an administrative court judge in New York required SideCar to suspend services, finding the business was in violation of the city's laws governing taxis and limousines, according to a report by The Wall Street Journal. However, shortly after the announcement similar apps posted that they were still offering services in New York State.

Ride-sharing and insurance disputes

Legislators throughout the country are pushing for legislation to help ensure passengers partaking in ride-sharing are properly protected. A court case out of California is drawing attention to the downfalls of ride-sharing. In the case, a six year-old girl was struck and killed by a ride-share driver. The ride-share company contends that their insurance should not be used, since the driver was not transporting a passenger at the time. The family argues the company should cover the costs associated with the accident.

It is possible that victims who find themselves in similar situations could allege an insurance company provided a bad faith denial. Insurance companies that find themselves in these situations should contact an experienced New York car accident defense lawyer to discuss the situation and build an innovative defense strategy to help limit liability.

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