What Does New Jersey Law Say About Auto Insurance for Uber and Lyft Drivers?

With the rise of rideshare services such as Uber and Lyft, ensuring that their drivers are sufficiently insured has become a critical issue. Section 39:5H-10 of the New Jersey Statutes specifically addresses this concern, establishing mandatory insurance requirements for drivers working with transportation network companies (TNCs). Understanding these rules is essential for drivers and could be very important to someone if they are injured in an accident involving a rideshare vehicle. 

Section 39:5H-10 mandates that a driver for Uber, Lyft or another TNC must carry specific auto insurance coverage beyond the standard personal policy required of New Jersey motorists. The particular amount of coverage depends on whether the driver is waiting for a ride request, en route to pick someone up or actively transporting a passenger. The statute outlines the following coverage requirements for each of these three situations:

• Driver’s app on, waiting for a ride request — When a driver is logged into the TNC app but has not yet accepted a ride request, they must carry a minimum of $50,000 in liability coverage for bodily injury or death per person, and at least $100,000 in coverage per accident. They must also maintain a minimum of $25,000 in property damage liability per accident.
• Ride ordered, driving to pick up passenger — Once a driver has accepted a ride request and is on their way to pick up a passenger, the insurance coverage must increase significantly to a minimum of $1.5 million in liability coverage for bodily injury or death per accident. Additionally, the driver needs to have at least $1.5 million in uninsured/underinsured motorist coverage.
• Passenger in car, traveling to destination — When a passenger is in the vehicle, the same coverage requirements apply as when they are traveling to pick up a fare. 

Should an Uber or Lyft driver be traveling without the app on, they are no longer required to meet TNC insurance requirements. Any accident would be covered by their personal auto policy. While major rideshare companies including Uber and Lyft typically provide coverage that complies with state law, drivers should be sure regarding their specific rights and responsibilities as contractors. Failing to have the appropriate insurance coverage can lead to significant financial liability in the event of an accident, as well as penalties for non-compliance with New Jersey law.

Though major transportation networks have some standards for the cars used by their drivers, they are not subject to the same inspection rules as commercial passenger vehicles, so there could be a higher risk of a dangerous malfunction. Rideshare operators might also be more subject to accidents stemming from speeding or distracted driving, as they focus on completing each ride quickly and finding their next fare.  

If you’ve been hurt in a collision involving a rideshare vehicle, Kevin T. Kutyla, Esq. can pursue the full amount of damages that you’re entitled to. My firm is located in Succasunna and serves injury victims throughout Morris and Sussex counties. To schedule a consultation, please call 973-940-8970 or contact me online.