Kentucky Court Rules on Rideshare Driver’s UIM Coverage in Landmark Case

In a pivotal 2024 decision, the Kentucky Court of Appeals addressed the complex insurance issues surrounding rideshare drivers. Lyft driver Kimberly Rogers, involved in a crash while en route to pick up a passenger in February 2022, sought underinsured motorist (UIM) benefits from both Lyft’s carrier, Allstate, and her personal insurer, Erie. The crux of the issue was whether Rogers was entitled to UIM coverage under either policy.

The court upheld the trial court’s decision, which found that while Kentucky law mandates insurers to offer UIM coverage, policyholders, including commercial entities like Lyft, have the option to decline it. Allstate had offered UIM coverage, but Lyft chose not to accept it, leaving Rogers without UIM benefits through Lyft’s policy. Furthermore, her personal Erie policy explicitly excluded coverage for vehicles hired out for a fee or available for public hire, which the court affirmed was clear and applicable since Rogers’ vehicle was in use for business purposes at the time of the accident.

Rogers contended that her personal use of the vehicle for Lyft did not make it available to the general public like a taxi; however, the court disagreed, emphasizing that her vehicle was indeed hired at the time of the accident. Additional arguments concerning policy exceptions and public policy were also dismissed by the court, underscoring that the specific use of a vehicle for business requires explicit disclosure and appropriate coverage adjustments on insurance policies.

The case underlines the importance for rideshare drivers to thoroughly understand and comply with insurance requirements, especially concerning disclosure of vehicle use for business purposes. Insurers are also developing specific rideshare policies to address these new business models, which could help prevent similar disputes in the future.