The amount of compensation that Lyft will pay after an accident depends on when the accident occurred. Lyft advertises that it maintains a $1.5 million insurance policy and, while that is true, those limits will not apply in every case.

Lyft’s insurance policy breaks down the rideshare experience into three phases.

Phase One – The Lyft app is open, and the driver is awaiting a ride request

The first phase of a Lyft ride is when the driver’s Lyft app is open and they are waiting for a ride request. During this phase, the Lyft driver’s personal policy is the first source of coverage. However, Lyft’s insurance policy provides an additional $50,000 per person/$100,000 per accident in coverage.

When it comes to the driver’s individual policy, in New Jersey, all motorists must maintain bodily injury liability coverage in the amount of at least $15,000 per person/$30,000 per accident. That said, most insurance policies include exclusions for accidents that occur while the insured is transporting someone for a fee. Thus, Lyft drivers and should purchase rideshare insurance. However, not all drivers purchase this additional insurance.

Phase Two – The driver is matched up with a rider

As soon as the Lyft app matches a driver and passenger, the company’s primary insurance policy applies. Specifically, that policy includes:

$1.5 million in bodily injury coverage
$1.5 million in third-party liability coverage
$1.5 million in uninsured or underinsured motorist protection

Under New Jersey law, a Lyft passenger is guaranteed up to $1.5 million in coverage for their medical expenses. Thus, even if a driver’s personal insurance policy lapsed, or did not apply, Lyft is responsible for the full $1.5 million in coverage.

Phase Three – Once the driver picks up the passenger

Phase Three of a Lyft ride begins when the driver picks up the passenger and lasts until the driver drops the passenger off at their destination. The insurance coverage available in Phase Three is identical to that in Phase Two.

$1.5 million in bodily injury coverage
$1.5 million in third-party liability coverage
$1.5 million in uninsured or underinsured motorist protection

While Lyft’s insurance policy seemingly provides ample coverage in Phases Two and Three, the coverage outside these phases is significantly less. Additionally, because these insurance limits are cumulative, even the Phase Two and Phase Three limits can easily be reached if there are multiple passengers who are injured in the crash.