Personal Injury Protection (PIP) Benefits with Uber and Lyft

If you are an Uber or Lyft driver that is involved in an auto accident in New Jersey, or if you were a passenger or a pedestrian that was injured by a ridesharing vehicle, you might be wondering who is responsible for covering your medical expenses.   Under New Jersey’s No Fault insurance law, each driver and passenger, in general, is responsible for paying their own medical bills, regardless of who was at fault in an accident.  When ridesharing services, such as Uber or Lyft are involved, however, many insurance coverage issues are largely unresolved at this point in time.

According to N.J.S.A. 39:6A-3.2, all “automobile” insurance policies must include the insurance coverage required by N.J.S.A. 39:6A-1, which includes Personal Injury Protection (or PIP coverage).   An “automobile” is defined in N.J.S.A. 39:6A-2 as including: (1) private passenger automobiles, so long as they are not used as taxis or rented to others; and (2) pickups trucks and/or vans, so long as they are used for recreational purposes, are owned by an individual and/or family, and are not generally used for the insured’s business (other than farm work).

In New Jersey Manufacturers Ins. Co. v. Hardy, 178 N.J. 327 (2004), the Supreme Court of New Jersey analyzed the meaning of “automobile” in this context and concluded that the definition first focuses on the category of vehicle and then, only afterwards, analyzes the vehicle’s use.  Thus, for example, a private passenger automobile used for delivering pizzas would qualify as an “automobile,” even though it is being used exclusively for commercial purposes since it is not being used as a taxi or rented with a driver.  Conversely, if a van was used for pizza delivery it would not qualify as an “automobile,” and would therefore not require PIP, due to the commercial use of the vehicle.

In Bello v. Hurley Limousines, 249, N.J. Super. 31 (App. Div. 1991), the Appellate Division, analyzing a traditional taxi cab service in 1991, held that, in determining whether a private passenger vehicle constitutes a livery or a rented with a driver vehicle, the general use of the vehicle, in contrast to its particular use at the time of the accident, must be analyzed.  Thus, the court there rejected a case-by-case analysis as far as the use of the vehicle at the time of the accident is concerned.

While the Bello analysis makes sense in terms of the context of the traditional taxi cab services, in the context of today’s ridesharing services, this framework is due to be re-visited by our courts. In determining whether an Uber or Lyft vehicle constitutes an “automobile” in this context, a case-by-case analysis seems more appropriate.  Such a vehicle may very well cease to be an “automobile,” at least from the time the driver accepts a trip and is en route to pick up a passenger, if not earlier when the driver is available to accept a trip.  When a ridesharing driver is not available for a trip, however, and is driving their vehicle around for personal purposes, the vehicle should in fact be considered an “automobile.”

Should a ridesharing service be acting as a livery service at the time of an accident, therefore not constituting an “automobile,” they would not be afforded the Verbal Threshold defense due to the commercial vehicle exception.   For personal injury victims, this would mean that they would not be required to demonstrate that their injuries overcome the Verbal Threshold.

With respect to medical expenses or PIP coverage, if you were the driver or a passenger in a non-ridesharing automobile that was involved in an accident with another ridesharing vehicle, you would simply open a no fault PIP claim with either your own auto carrier (if you have one) or that of a resident relative or the host vehicle.   If you were a ridesharing driver, a passenger in a ridesharing vehicle, or a pedestrian that was involved in an accident with a ridesharing vehicle, on the other hand, PIP coverage issues become more complicated.

As an Uber or Lyft driver, your main source of medical expense coverage would be through your own personal auto policy.  If, however, your personal auto insurer claims that you were engaged in commercial use of the vehicle at the time of the accident, and your personal auto policy contains a commercial use exclusion (and most do), they may very well deny PIP coverage.  Although Uber on its website states that PIP coverage under their policy “is provided in certain states at similar levels as limos or taxis,” New Jersey’s taxis and limos have no obligation to carry PIP benefits.  Thus, drivers will likely not be able to get their medical expenses covered by Uber or Lyft.  Thus, as a last resort, if their private health insurer refuses to provide coverage for motor vehicle related medical expenses, ridesharing drivers may be left with no PIP coverage and would need to recover for medical expenses in a liability lawsuit.

With respect to passengers injured in ridesharing vehicles, they would first seek PIP coverage through their own policies or, if they do not own an auto, through a resident relative.  If neither of these options are available, they may be able to seek PIP coverage through the ridesharing driver’s personal auto policy or under the ridesharing carrier’s liability policy.  In the event there is no PIP coverage or not enough PIP coverage, excess amount would have to be recovered in a liability lawsuit.

Finally, with respect to pedestrians injured by ridesharing vehicles, in addition to be covered by their own auto carrier (if they have one) or that of a resident relative, pedestrians should be aware that they can apply for PIP coverage through the ridesharing vehicle’s liability carrier since pedestrian PIP coverage is mandated for limos and taxi drivers by N.J.S.A. 17:28-1.3.

If you were injured in an auto accident involving an Uber, Lyft, or other ridesharing vehicle, contact the auto accident attorneys at Harrell, Smith and Williams today to discuss these complex insurance coverage issues.   When ridesharing services are involved, it is vital that you seek an attorney that is experienced in this complex and evolving area of law.  Our attorneys will evaluate your case to seek coverage from all possible sources to obtain the compensation you deserve.  Call us today at (908) 264-7228 for a free consultation.

Posted in Auto Accident, automobile insurance, Injured Passengers, Personal Injury.