Win With Nguyen
Quick answer: Uber and Lyft liability insurance has three phases. Phase 0 — app is off — the driver's personal auto insurance applies and rideshare coverage does not. Phase 1 — app is on, waiting for a ride — Uber/Lyft provide $50,000 per person / $100,000 per accident liability. Phase 2 — ride accepted, driver en route to pickup — coverage jumps to $1,000,000 in liability. Phase 3 — passenger in the vehicle — $1,000,000 in liability plus uninsured / underinsured motorist coverage. Most lawyers miss Phase 1 claims entirely.
Uber and Lyft structure their insurance coverage by phase of the trip, not by time or location. Understanding which phase was active at the moment of the crash is the single most important step in a rideshare case, because the difference between Phase 1 coverage ($50K/$100K) and Phase 3 coverage ($1M plus UM/UIM) can be more than a million dollars.
Phase 0 — App off. The driver is off the clock. Uber and Lyft provide no coverage. Only the driver's personal auto insurance applies. Note: most personal policies exclude commercial / livery use, so even personal coverage may deny the claim if they learn the driver was using the vehicle for rideshare generally.
Phase 1 — App on, waiting for a ride request. The driver is logged into the app but has not accepted a ride. Uber and Lyft both provide contingent liability coverage: $50,000 per person for bodily injury, $100,000 per accident, $25,000 property damage. This coverage is contingent — it only kicks in if the driver's personal insurance denies the claim, which is common because personal policies often exclude livery use.
Phase 2 — Ride accepted, driver en route to pickup. The driver has accepted a ride and is driving to the passenger. Coverage jumps dramatically: $1,000,000 total liability limit applies, plus uninsured/underinsured motorist coverage (UM/UIM).
Phase 3 — Passenger in the vehicle. From the moment the passenger enters the vehicle until they exit at their destination. Same $1M liability plus UM/UIM.
Phase 1 cases are where many rideshare claims fall apart. The personal auto insurer denies the claim because the driver was "using the vehicle for commercial purposes." Then the victim's lawyer, unfamiliar with rideshare layering, accepts that denial and settles for policy limits on the driver's personal policy — or, worse, doesn't file against Uber/Lyft at all.
That's a mistake. Under Texas Transportation Code §2402, rideshare companies are required to provide contingent coverage during Phase 1. If personal insurance denies, the Uber/Lyft $50K/$100K applies. And because many crashes in Phase 1 happen at surface-street speeds where injuries are often still real but not catastrophic, $50K/$100K is often enough to make a meaningful difference.
Uber and Lyft keep precise GPS, time-stamp, and trip-state data for every driver. Phase determination is not a guess — it's documented down to the second in their servers.
Request the trip log and the ride state history through a preservation letter sent to Uber/Lyft legal immediately. Wait too long and this data may be retained only for limited periods. A good attorney sends this letter within days of being retained.
If the driver's app was on but a ride was not active, Phase 1 applies. If en route to pickup, Phase 2. If passenger was in the vehicle, Phase 3.
Rideshare passengers — straightforward. Phase 3 coverage applies.
Other drivers hit by a rideshare driver — Phase 2 or 3 coverage applies when the rideshare driver was on an active ride/en route.
Pedestrians and cyclists hit by a rideshare driver — same rule.
Rideshare drivers themselves — Phase 2 and 3 UM/UIM coverage can apply if the driver is hit by an uninsured/underinsured at-fault driver while on an active trip.
Passengers in other vehicles struck by a rideshare driver — yes, through the rideshare company's liability coverage during Phase 2 and 3.
When a rideshare crash produces catastrophic injuries that exceed the $1M limit, an experienced attorney will look for additional coverage:
The rideshare driver's personal auto policy — may still apply in some scenarios.
Your own underinsured motorist coverage (UIM) — if you were a passenger or another driver, your personal UIM may stack on top of the rideshare coverage.
Employer policies — if the at-fault vehicle was a commercial vehicle driven by someone on the job for another employer.
Umbrella policies — personal umbrella coverage on any involved party.
The goal is to identify every available source of coverage and stack them appropriately. Most lawyers settle at the first obvious policy; the difference in outcome can be enormous.
Phase 3 coverage — $1,000,000 in liability plus uninsured/underinsured motorist coverage. The $1M limit applies whether the Uber driver or another driver was at fault. If the Uber driver was at fault, liability coverage responds. If another uninsured or underinsured driver was at fault, UM/UIM responds.
Depends on whether the Uber driver was en route to pick up a rider (Phase 2) or just waiting for a request (Phase 1). Phase 2 = $1M liability. Phase 1 = $50K/$100K contingent coverage from Uber. The driver's personal insurance is also potentially in play.
Coverage structures are similar between Uber and Lyft — both follow the Texas Transportation Code §2402 framework. Policy limits are similar as of current reporting, though these can change.
In most cases, no — drivers are classified as independent contractors, not employees, so direct liability against the company is difficult. But the rideshare insurance policy is available for claims against the driver, and that is where recovery usually comes from.
Immediately through the app, and through an attorney-sent preservation letter within days. Trip data is the foundation of the case and must be preserved before routine deletion cycles remove it.
This guide is general information about Texas law, not legal advice for your specific case. Every case has different facts. For a free case-specific review, call (713) 842-9442 or start an online case review.
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