Most city, county, and state jurisdictions require Transportation Network Companies (such as Uber or Lyft) to insure their drivers and passengers.
According to a May 2014 analysis of rideshare insurance by Huffington Post, someone involved in an rideshare accident will have two layers of possible insurance.
The first is the driver's personal insurance, which might not go into effect because the driver is technically working while driving for Lyft or Uber.
The second is what Rideshare companies call "contingency insurance," that only starts paying for bills if the driver's insurance doesn't.
Lyft and Uber also provide uninsured motorist insurance if you are injured by another vehicle through no fault of your rideshare driver.
The issue at hand is whether or not these companies want to use their insurance policies. If you're involved in an accident riding with a Lyft driver then the driver's insurance and Lyft's insurance might claim the other company should be paying for your treatment.
What's Going on in Seattle
On July 14, 2014 Seattle City Council approved Ordinance 124524 C.B 118140 which defined “ insurance requirements for transportation network companies and affiliated vehicles.”
During the provisional period described in subsection 6.310.335, file evidence with the City that each vehicle affiliated with a transportation network company has liability insurance in an amount no less than required by RCW 46.72.050 at any time while active on a TNC dispatch system and underinsured motorist coverage indicating a minimum coverage of $100,000 per person, and $300,000 per accident, at any time while active on the TNC dispatch system. The insurance policy, and any related driver contracts if applicable, must be submitted to the Director.
If there is no change to State insurance requirements by the conclusion of the provisional period, the TNC shall provide evidence that each vehicle affiliated with a transportation network company has insurance in an amount no less than required by RCW 46.72.050 and underinsured motorist coverage indicating a minimum coverage of $100,000 per person, and $300,000 per accident, at any time while active on the TNC dispatch system.
On the surface, it seems that ride-share companies actually provide more liability coverage than other types of transportation companies. Uber, Lyft, and Sidecar all claim they have $1 million liability policies, which exceeds the $325,000 required by the City of Seattle for taxi drivers.