Uber Litigator Explains Insurance Coverage, Defends Background Checks

By Denise Johnson | November 16, 2016

The goal of six year old Uber is to provide reliable transportation to everyone, everywhere. Uber is currently in 596 cities and dealing with global regulations requires an insurance product that is diverse and fluid, according to Kathleen Waitzman, legal director of Global Insurance & Claims for the ride-hailing giant.

“Without insurance there would be no ride-sharing economy,” said Waitzman, who has been with the company since its founding in 2009.

The legal director spoke at the recent International Association of Claim Professionals’ annual conference held in Sonoma, Calif.

Uber uses four platforms to offer low cost to luxury rides that appeal to many different price points. The ride-sharing company wants to reach everyone through cell phones and everywhere through its partner drivers.

The four platforms available to passengers include economy, premium, accessibility and carpool.

The peer to peer delivery models – economy, accessibility and carpool – are covered by non-owned commercial auto insurance.

The premium platform which offers a professional, licensed livery driver is insured via traditional auto insurance.

Waitzman explained that there are three relevant insurance periods during a rideshare trip:

  1. The app is on and the driver is waiting to connect with a rider. During this period, the insurance is provided by Uber – liability coverage when necessary with 50/100/25 limits.
  2. When the driver is en route and the trip is accepted. The insurance coverage provided (in some states it is considered primary insurance, others it is contingent) is $1 million liability, $1 million uninsured/underinsured limits with contingent collision and comprehensive coverage.
  3. While on the trip, at time of arrival and when the driver picks up and drops off a passenger – The insurance coverage is the same as # 2 above.

James River Insurance Company is the insurance provider for all three periods.

Waitzman said that a model bill, which some states have passed, requires the insurance offered by Uber to be primary. In that case, she said, there is $1 million combined single limit liability coverage, with no reliance on personal auto insurance while en route or during the trip.

Uber claims advocates, former transportation workers and insurance litigators process claims, defend insurance litigation and manage coverage issues.

The San Francisco-based ride-sharing company monitors social media sites, such as Facebook and Twitter, for reports of claims. Upon receipt of a claim, Uber provides notice of the loss to James River and acts as a liaison between the insurer and claimants for auto liability and general liability claims.

Because some cities have more restrictive regulations, Uber does have geofencing capabilities within the app, she explained.

Passenger Safety Questioned

The deadly shooting rampage by an Uber driver in Michigan earlier this year raised concerns that Uber rides may be less safe than standard taxis. According to an Associated Press article, the San Francisco’s district attorney filed suit against Uber alleging Uber misled passengers into believing its driver background checks are the most comprehensive available.

In their lawsuit, San Francisco prosecutors highlighted that police there and in Los Angeles found 25 Uber drivers that had serious criminal histories that were not flagged during the background check or may have been disregarded by Uber.

Waitzman said that partner drivers are qualified through a background check that reviews criminal history going back seven years and includes a sex offender search and driving history review. Drivers are also rated through anonymous feedback provided by customers. Taxi companies contend that the background check should include a fingerprint search, because law enforcement experts say it’s the most comprehensive way to conduct a background check. Taxi regulators usually require it.

Uber said that fingerprint checks, which are run through the FBI’s national database, are imperfect.

In a separate lawsuit settlement, the ride-sharing firm can no longer claim its background checks are “industry-leading.” Uber agreed to pay $28.5 million to settle a lawsuit that alleged such safety claims were false. As part of the settlement, Uber’s “safe ride fee” will become a “booking fee.”

While Lyft re-checks driver backgrounds each year, Uber doesn’t.

According to Waitzman, the ride-sharing firm’s insurance requirements meet and often exceed the amount taxis and limousines are required to carry.

(Associated Press writers Paul Elias in San Francisco and Paul J. Weber in Austin, Texas, contributed to this story, along with AP news researchers Rhonda Shafner and Jennifer Farrar in New York.)