Michigan Sets Insurance Requirements For Uber, Lyft Drivers

For several years, ride-sharing companies like Uber and Lyft have been operating in Michigan without any statewide regulation, leading to auto insurance coverage concerns, as well as liability insurance questions, in the event a driver is involved in an accident.

But all this changed on March 21, 2017, when Public Acts 345, 346, 347 and 348 went into effect.

What do these new laws do? They basically create a framework under which ride-sharing companies, such as Uber and Lyft, must conduct business in Michigan.

New Michigan Ride-Sharing Laws

Under the new laws, ride-sharing companies must register with the State of Michigan and pay a per-vehicle fee. Drivers, however, do not register through the state and, instead, must register through the company for which they work. This registration requirement helps make it clear that, in Michigan, these drivers are considered independent contractors.

Perhaps more importantly, the laws establish the amount of liability insurance coverage that drivers must have, and clarify who is responsible for paying Michigan no-fault benefits in the event a passenger is injured in an accident.

Under the laws, liability coverage is essentially controlled by what part of the trip the vehicle was in at the time of the accident. Drivers must have:

  • $1 million in liability coverage for crashes that occur during a pre-arranged ride – that is, while the driver is transporting a passenger.
  • $50,000 in liability coverage for collisions that happen between pre-arranged rides – that is, while the driver is waiting for the next customer.

Ride-Sharing Laws & No-Fault Coverage

Regarding no-fault coverage, the laws make it clear that injured passengers must rely on their own insurance company for any personal protection insurance (PIP) benefits, including allowable expenses, work loss, replacement services and survivor’s loss.

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 – in other words, if the passenger doesn’t have his or her own no-fault policy, and a spouse or resident relative doesn’t have a policy.

In addition, the laws impose much-needed passenger safety measures, including:

  • all drivers must undergo extensive background checks.
  • vehicles must be regularly inspected.
  • 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 be provided a photo of their driver and the vehicle’s license plate number.
  • drivers must display “signage” on their vehicle, identifying the ride-sharing company with which they are affiliated.

In this video, Grand Rapids auto accident attorney Tom Sinas talks about the Michigan ride-sharing laws that were enacted in March 2017.

 

If you’ve been injured while a passenger in a ride-sharing vehicle, our experienced Michigan auto accident attorneys can answer your questions and help you get the compensation you deserve. Contact us for a free initial consultation.

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