Lyft driver Julio Beltran had a bad enough day Sept. 9, when he was carjacked at gunpoint at a South Side service station.
“One guy just said, you work for Lyft?” Beltran recalled. “I say yeah---they showed me the gun---they said open the door!”
Beltran had switched off his Lyft app before driving into the gas station. Technically that made him just another driver. But when he contacted his insurance company about the theft of his car, they denied his claim, saying he had never informed them of his rideshare activities.
Then they canceled him.
Beltran learned what many rideshare drivers have learned---the hard way. Failure to cover that insurance base, can be a costly mistake.
“Uber and Lyft put these facts on their website,” says attorney Bryant Greening, of LegalRideshare.com. “They don’t do a good job of publicizing it.”
Actually, Uber and Lyft both provide varying levels of insurance, depending on whether a driver merely has his app switched on, he’s enroute to picking up a passenger, or has one in the vehicle. But most personal insurance companies, the ones drivers might have had before becoming rideshare drivers, won’t provide coverage without additional fees. Some don’t cover at all. And they frown on finding out, after the fact, that their customers were driving for Uber or Lyft.
Because of that, a secondary insurance market has sprung up, exclusively for the rideshare market. Various insurance companies offer what are known as rideshare endorsements, to cover the gaps in the insurance offered by Uber and Lyft. But even though those policies can be inexpensive, as little as $15 per month---many drivers don’t buy them.
“In our most recent survey of over 1100 drivers, we did find that a majority of drivers do not have rideshare insurance,” says Harry Campbell, author of the Rideshare Guide and proprietor of the popular website therideshareguy.com. “This is pretty consistent with findings in the past and informal polls we’ve done too.”
Former Lyft driver Mary Campbell thought she had taken care of the insurance issue when she provided proof of her personal policy before starting with Lyft last year.
“I did what I needed to in terms of full coverage,” she said. “But nobody told me how to protect myself.”
She found out last April, when her car was t-boned in the intersection of 63rd and King Drive. Like Beltran, she had not told her insurance carrier she was working as a rideshare driver.
“My insurance at that point pretty much said no, we will not cover you,” she said.
Campbell thought she was covered when she notified Lyft that she had insurance. But she was mistaken---because her company, like so many others, did not extend their private coverage to her rideshare business. Lyft’s insurance policy did cover her accident, since she had a passenger in the car. But the rideshare companies have significant deductibles. Those range from $1,000 for Uber, to $2,500 for Lyft. Campbell said she is still paying off her car, which was effectively demolished in the crash.
“They sold me on a dream,” she said. “I thought, win-win situation. But it has been devastating.”
Harry Campbell, the rideshare web guru, offers extensive information about insurance coverage in every state on his website.
“I recommend all drivers at least get quotes for rideshare insurance,” he told NBC 5. “There are multiple companies in almost every state now, and the prices are competitive with regular insurance policies. Some drivers even save money by switching to rideshare insurance.”
Beltran, the carjack victim, was canceled outright by his insurance company, American Alliance, who noted that on his application, Beltran checked “no” indicating he would not be working as a rideshare driver.
“It is obvious that there was a clear misrepresentation of the endorsed policy application that was provided by the agent to Alliance, and we would never have accepted Mr. Beltran as a risk,” Donald Salerno, the company’s vice president of claims told Hilda Rodriguez of our sister station Telemundo Chicago. “From Alliance’s perspective, we have acted properly in this matter.”
Beltran indicated that the questions were in English and he did not understand everything he had signed. But there is a twist.
Tuesday night, more than a month after it was stolen, his car turned up in a traffic accident in Chicago. Whoever was driving it ran away, and Beltran has notified his former insurance broker that his car was recovered.
Salerno, the insurance company vice-president, indicated they stand by their decision to cancel, because he did not reveal his rideshare status.
As for Lyft, they have expressed concern to Beltran, offering him a week of car rental as he attempted to get his life in order after the September incident.
“What is being described is truly horrific and frightening,” spokesman Lauren Alexander told our Telemundo colleague. “While the incident did not happen on the platform, we have reached out to the driver to extend our support.”