Uber & Lyft Crashes in Colorado: Why This Is Not a Normal Car Accident Claim

Injured while riding in an Uber or Lyft? Or hit by one? The insurance situation is incredibly complex. Learn the “3 Periods” of coverage and how to ensure you get the million-dollar policy, not the minimum.

If you were injured while riding in an Uber, Lyft, or other rideshare vehicle—or if you were hit by one—you might assume it’s a guaranteed payout. After all, these are billion-dollar companies that advertise $1 million insurance policies.

The reality is much more complicated.

Uber and Lyft do not “employ” their drivers; they are independent contractors. This means the companies try desperately to distance themselves from crashes. Whether you get access to that $1 million policy or are stuck with state-minimum coverage depends entirely on what the driver was doing at the exact second of the crash.

You need to know where you stand immediately, before their high-powered legal teams try to downgrade your claim.

The Crucial “3 Periods” of Rideshare Insurance

Everything depends on the driver’s “status” on the app at the moment of impact.

  • Period 0: App is OFF. If the driver was just driving for personal reasons with the app off, Uber/Lyft provide ZERO coverage. You are stuck with the driver’s personal auto policy (which might be state minimums: $25k/$50k).
  • Period 1: App is ON, waiting for a ride request. The driver is technically “working” but hasn’t accepted a ride. Coverage here is tricky. Uber/Lyft usually provide contingent liability coverage (often $50k/$100k) that only kicks in if the driver’s personal insurance denies the claim.
    • DANGER ZONE: Many personal auto policies explicitly DENY coverage if the driver was using the car for business (rideshare) without a special endorsement. You could be left in a massive coverage gap here.
  • Periods 2 & 3: Ride accepted OR passenger in the car. This is the “safe” zone. Once a driver accepts a ride (Period 2) and while you are in the car (Period 3), Uber and Lyft’s $1 million liability and UM/UIM policy is generally active.

If You Were the Passenger

You are usually in the best position. Because you were in the car (Period 3), you should have access to the $1 million policy for your injuries, regardless of whether your Uber driver or the other car was at fault.

  • WARNING: Even with $1 million available, their adjusters will still try to lowball you. They didn’t become billion-dollar companies by paying full value on every claim easily.

If You Were an Uber/Lyft DRIVER

You are in a tough spot. If another driver hits you, you might have to rely on Uber’s Uninsured/Underinsured Motorist (UM/UIM) coverage if the at-fault driver has low limits.

  • The “Deductible Trap”: If you need to use Uber/Lyft’s “collision” coverage to fix your own car, prepare for a shock. Their deductibles can be as high as $2,500—much higher than standard personal policies.

Your Urgent Action Plan

Evidence of the driver’s status disappears fast. You need to lock it down now.

  1. Screenshot Everything: If you were the passenger, screenshot your ride receipt, the driver’s profile, and the trip route immediately.
  2. Get Police Involved: Ensure the police report notes specifically that this was a rideshare trip.
  3. Do Not Give a Recorded Statement: Uber’s insurance representatives are highly trained to find loopholes to drop you from “Period 3” down to “Period 1” or “Period 0” if there is any ambiguity.

Frequently Asked Questions

1. Can I sue Uber or Lyft directly? Almost never. Because drivers are “independent contractors,” it is very difficult to sue the corporate entity directly unless you can prove they were negligent in hiring a dangerous driver (e.g., they ignored a background check showing prior DUIs).

2. What if my Uber driver was hit by an uninsured drunk driver? You are likely covered. Uber and Lyft provide $1 Million in Uninsured Motorist (UM) coverage for passengers in this exact scenario. You would file your claim against Uber’s policy, not the broke drunk driver.

3. I’m a driver, and I didn’t tell my personal insurance I drive for Lyft. Am I in trouble? You might be. If you get in a wreck while “Period 1” (waiting for a ride), your personal insurer might deny your claim for “material misrepresentation” if you didn’t buy a rideshare endorsement. You need a lawyer immediately to navigate this coverage gap.

4. How long do these claims take? Rideshare claims often take longer than standard crashes because there are at least three insurance companies involved: yours, the driver’s personal one, and Uber/Lyft’s corporate one. They all point fingers at each other first before anyone pays.