Michigan Insurance Coverage for Ride-Sharing Services
Michigan is a no-fault state, so there are a lot of gray areas as to whether Michigan auto insurance coverage will extend to Ride-Sharing drivers and passengers. Most Ride-sharing companies’ coverage is secondary to the driver’s policy. Michigan auto insurance companies do not provide insurance coverage for personal autos while in service for ride-sharing services.
Michigan Updates Law for Ride-Sharing Drivers
March 21, 2017, Michigan legislature clarified requirements for Ride-Sharing Drivers. The state will now regulate Ride-Sharing services the same way as limousine and taxicab carriers. The new law requires all drivers to carry:
- $1 million in liability coverage for crashes that occur during a pre-arranged ride – while the driver is transporting a passenger.
- $50,000 in liability coverage for collisions that happen between pre-arranged trips – while the driver is waiting for the next customer.
Under the reform act passed effective July 1, 2020, Uber and Lyft operators will be required to obtain $250,000, $500,000, or unlimited coverage. Drivers will need a rider for attendant care over the applicable limit.
Michigan law requires these safety requirements for ride-sharing drivers.
- All drivers must undergo extensive background checks.
- Vehicles must have regular inspections.
- Ride-sharing companies cannot hire drivers with multiple moving violations, major driving violations, a felony conviction, or who are on the National Sex Offender Registry.
- Before riding, passengers must see a photo of their driver and the vehicle’s license plate number.
- Cars have to display “signage” on their vehicle, identifying the ride-sharing company with which they are driving.
- Drivers must be at least 19 years old; have a valid driver’s license issued from Michigan or another state.
- Can’t have more than four moving violations or one major violation within the last three years.
- Drivers on the National Sex Offender Public Website; or have a felony conviction within the last five years.
The recent law clarifies that injured passengers must rely on their own insurance company for any medical benefits. The only way an injured passenger can get PIP benefits from a driver’s insurance company is if there is no other source of insurance, which means that the passenger does not have their no-fault policy. A passenger who is not required to maintain auto insurance can claim benefits under the driver’s policy but is subject to whatever PIP choice they selected. A final option would be to file a claim for PIP benefits through the Michigan Assigned Claims Plan (MACP).
Ride-sharing services provide auto insurance coverage in three sections:
- Not Logged In: Personal Driving: No insurance provided by any of the services. Their insurance policy only covers drivers.
- Logged In & Waiting For Ride Request:
Lyft provides (Contingent liability coverage with 50/100/25 limits provides secondary coverage that pays only for losses not covered by the driver’s policy).
UberX provides (Contingent liability coverage with 50/100/25 limits provides secondary coverage that pays only for losses not covered by the driver’s policy).
- En Route To Pick Up Passengers or Driving Passengers:
Lyft provides commercial liability insurance with $1 million limits. Uninsured/underinsured bodily injury with $1 million limits. Contingent comprehensive and collision coverage with a $50,000 limit and $2,500 deductible (only for drivers with personal comprehensive and collision coverage).
UberX provides Contingent liability coverage with 50/100/25 limits provides secondary coverage that pays only for losses not covered by the driver’s policy.
Michigan Auto Insurance ride-sharing coverage options may be available.
If your Michigan auto insurer classifies your vehicle for business use, the may provide some coverage.
Insurers can continue to exclude drivers for Uber and Lyft from personal auto coverage (MCL 500.3017). Uber and Lyft are required to make potential drivers aware of standard insurance exclusions and receive their written acknowledgment of these exclusions.
State Farm has added an option to add a ride-share rider to your personal automobile policy. Check with an agent to see if they have endorsements that you can add to your policy. Make sure that your vehicle and passengers have coverage before joining one of the ride-sharing services.
The usual coverage under a Michigan auto insurance policy:
Finally, for detailed information on the coverage on a Michigan auto insurance policy, click on the link for Understanding Michigan auto insurance.