Before getting into an “Uber” car in Michigan, or for that matter becoming an Uber driver in Michigan, it would be prudent to thoroughly investigate the idea before proceeding with either plan. There are several inherent insurance related risks associated with doing so when it comes to no-fault insurance coverage for your medical bills, wage loss and, if necessary, your suffering. The first question you should ask the Uber driver is whether he or she is commercially insured under a business policy of no-fault insurance authorized to operate his or her specific automobile to transport individuals for hire? And, whether the actual motor vehicle being operated is specifically scheduled on that Michigan no-fault policy of insurance? If neither, the ramifications can be irreparable if an accident were to occur. Generally, a personal auto no-fault policy will specifically exclude from coverage for liability and medical, a person who is operating a scheduled vehicle that is being used — at the time of the wreck — “to transport a person for hire.” Pull your own auto policy and read it; most likely, that exactly worded exclusion is the first listed in the policy. Thus, if the Uber driver has simply insured his or her car under a personal policy without informing their insurer that he or she, from time to time, operates as an Uber driver and then, when the whim of the moment stirs him or her to offer up an Uber ride, there will ultimately be no insurance coverage on that vehicle that will indemnify any loss the Uber driver causes/creates. The insurer will deny coverage and will litigate to the end, to enforce the exclusion. Thus, again, the ramifications can be irreparable to the injured passenger. First, the injured passenger will have to look to his or her own no-fault policy for medical bills and wage loss. See MCL 500.3114(2)(e) and MCL 500.3114(1). But if that injured person does not have insurance of his or her own, or is otherwise not married to a spouse who is insured or is not domiciled with a resident relative who has no-fault insurance, then — if the Uber driver is properly insured, only then does the injured passenger then look to the Uber driver’s no-fault policy for PIP benefits. MCL 500.3114(2)(e). But in the event the Uber driver is not properly insured, then, as a last resort, the injured passenger must seek benefits through the Michigan Assigned Claims Plan. See MCL 500.3172(1). Second, if the Uber driver is not properly insured, then the injured passenger will also have no collectible recourse directly against the Uber driver for personal injury damages suffered. And but for purchasing your own Uninsured Motorist Benefit coverage under your own no-fault policy, there may be no non-economic recovery for injury suffered at all. Meanwhile, the Uber driver who does not specifically and properly insure the vehicle is completely uninsured for not only the liability that he or she created to his or her passenger, but he or she also is barred from no-fault medical and wage loss PIP benefit eligibility because he or she is operating an owned motor vehicle that is excluded from coverage at that instance of business operation. See MCL 500.3113(b). Unlike the injured passenger, the Uber driver would also be excluded from the safety-net under the Michigan Assigned Claims Plan, too. See MCL 500.3173.
Authored by L. Page Graves