Insurance Gaps: Are You Covered in an Uber or Lyft Accident?

Rideshare companies like Uber and Lyft have transformed how Texans travel. However, when an accident happens, many victims are blindsided by insurance issues. You might assume you're fully covered, but in reality, gaps in insurance coverage can leave you stuck with unpaid bills, delayed claims, and unclear legal responsibility. At Trust Guss Injury Lawyers, we help victims navigate these coverage rules to protect their rights and secure fair compensation.

How Does Rideshare Coverage Work?

Uber and Lyft operate under a tiered insurance model that depends entirely on the driver's actions at the time of the crash. Insurance coverage shifts between the driver’s policy and the company’s commercial coverage, creating three distinct “phases” of liability. Texas law requires certain minimum coverage amounts, but those amounts vary and can create dangerous gaps.

Phase 1: App Off—No Coverage From Uber or Lyft

When the driver’s app is off, the driver is considered a private motorist, and only their personal auto insurance applies. Unfortunately, personal insurance often doesn’t go far, especially in severe crashes.

Texas requires minimum liability limits of just $30,000 per person and $60,000 per accident. That’s rarely enough in cases involving emergency care, hospitalization, or long-term injury. Worse, some personal policies specifically exclude coverage for commercial or rideshare use. If the insurer finds out the driver has been working for a TNC (transportation network company), even if they were “off-duty” at the time, they may deny the claim entirely.

What this means for you: You could face major challenges securing compensation, even when you didn’t cause the crash.

Phase 2: App On—Searching for a Ride

When the driver has turned on the Uber or Lyft app and is waiting for a ride request, the company offers what’s called “contingent” liability coverage. This includes:

• $50,000 per person for bodily injury
• $100,000 per accident total
• $25,000 for property damage

It sounds reassuring—but here’s the catch: that coverage only kicks in after the driver’s personal insurance denies the claim. If their policy accepts partial liability, the rideshare company might walk away. This phase creates one of the biggest insurance gaps in rideshare law.

Even if the driver was clearly “on the job,” gaps between personal and platform policies could complicate your ability to recover compensation. Victims often end up in lengthy disputes, stuck between two insurers pointing fingers at each other.

Phase 3: Ride Accepted—Full Coverage Applies

The strongest coverage exists when the driver has accepted a trip and is either on the way to pick up a passenger or actively driving someone to their destination. In this phase, Uber and Lyft are required to carry:

• Up to $1 million in third-party liability coverage
• Uninsured/underinsured motorist (UM/UIM) protection
• Contingent comprehensive and collision coverage (if the driver has this coverage on their personal policy)

This coverage provides critical protection for:

• Injured passengers
• Other drivers or pedestrians hit by the rideshare vehicle
• Damage to other vehicles or property

Even this coverage can be contested. If the company claims the ride had not yet started—or had just ended—they may argue for reduced coverage under Phase 2. A matter of minutes can impact how much protection applies.

Why These Coverage Gaps Matter

The problem with rideshare insurance isn’t just the layers of policies—it’s how easily victims can fall through the cracks. Here's how:

1. App Status Disputes: Rideshare companies keep detailed trip logs. But these aren’t always accurate. If a ride is logged incorrectly, Uber or Lyft may argue their insurance doesn’t apply.
2. Personal Insurance Loopholes: Drivers who haven’t disclosed their rideshare work to their insurer risk having claims denied. And even if the insurer agrees to pay, the minimum coverage limits may not come close to covering the true cost of your injuries.
3. Subrogation Delays: Even when Uber or Lyft’s contingent coverage applies, you may have to wait weeks or months for personal insurers to formally deny coverage before the platform policy kicks in. This leaves injured victims with no immediate financial support during their recovery.
4. Limited UM/UIM Coverage: Uninsured or underinsured motorist coverage can be life-changing in hit-and-run or multi-car accidents, but it doesn’t activate automatically. Victims must file separate claims, and eligibility depends on being in the correct trip phase.

Two Major Risk Areas for Rideshare Crash Victims

Understanding the riskiest moments can help you stay informed and better prepared if something goes wrong.

1. Pre-Trip Insurance Gaps: This includes any time the app is on, but no ride has been accepted. If a driver hits someone in this phase, victims may be stuck with low-limit personal insurance or contingent coverage that doesn’t pay enough.
2. App-Off Denials: If the app is off, Uber and Lyft provide no coverage at all. And if the personal insurer denies the claim because the driver was a frequent rideshare operator, there may be no policy that is willing to pay.

When Coverage Isn’t Enough

Even when Uber or Lyft’s $1 million policy applies, it may still fall short. In serious crashes involving traumatic brain injury, spinal cord damage, wrongful death, or multiple victims, the costs can far exceed what any one policy can pay. In these situations, victims may need to pursue:

• Additional compensation from third-party drivers
• Product liability claims for vehicle defects
• Wrongful death lawsuits against all responsible parties

Without legal guidance from someone familiar with rideshare cases, these additional sources of compensation may be overlooked entire

What You Can Do Right After a Rideshare Accident

Passengers, Pedestrians, or Other Drivers

• Document everything: Take photos, save app trip details, and get a copy of the police report.
• Get medical care right away—even if symptoms are mild.
• Don’t assume Uber or Lyft will “take care of it.” Contact a lawyer as soon as possible.

Uber or Lyft Drivers

• Notify both your personal insurer and Uber/Lyft immediately.
• Save your trip data and check for GPS or app status errors.
• If you don’t have rideshare endorsements or UM/UIM, talk to your insurer now to protect future coverage.

Why Trust Guss Injury Lawyers?

At Trust Guss Injury Lawyers, we’ve spent decades fighting for crash victims across Texas, including those caught in complex Uber and Lyft insurance disputes. We know how these platforms and insurers operate. Our team works fast to secure trip records, challenge denials, and identify every source of compensation available.

Standing Beside You When Life Is Upended

We approach every case with urgency, care, and respect, because we understand how disruptive these accidents can be to your life and livelihood. Our team is available 24/7 and committed to guiding you through the claims process with clear communication and responsive service. You deserve a team that will fight to hold all responsible parties accountable and pursue the full compensation you may be entitled to under Texas law.

Don’t Let Gaps in Coverage Leave You Unprotected

Contact Us Today

Rideshare accidents are complicated enough. You shouldn’t have to battle insurance companies just to get the care and compensation you need. At Trust Guss Injury Lawyers, we understand the fine print in these policies—and we know how to fight for victims caught in the coverage gap.

If you’ve been injured in an Uber or Lyft crash in Texas, let us review your case for free. Call us anytime, 24/7, at 888-298-4070 or contact us online to get started. We offer free consultations and only collect legal fees if we’re able to recover compensation on your behalf.