Court rulings reveal vulnerabilities
for ridesharing and delivery drivers
There’s at least one factor that may work in favor of gig drivers as they
seek insurance protection for their driving: whether their state regards TNCs as motor carriers … .
By Joseph S. Harrington, CPCU
You’re not going to get a lot of sympathy after “rear-ending” another vehicle, but it’s hard not to feel a little love for Robey Neeley, recently caught up in a 21st century “Catch-22.”[1]
Neeley hit another vehicle from behind while driving for the Lyft ridesharing service back in 2021. At the time, he was logged onto Lyft’s driver appointment app, but had not booked a ride or taken on any passengers.
Neeley first submitted a collision claim to his personal auto insurer, which denied coverage based on an exclusion for damage incurred when an insured vehicle is used by anyone logged into a “transportation network platform,” whether there was a passenger in the vehicle or not.
Neeley then submitted the claim to Lyft’s auto insurer. This time, he came up short because that policy’s collision coverage only applied in four “periods”: while the driver was heading toward a location requested by a patron, while loading passengers at that location, while driving to the requested destination, and while dropping off passengers at the requested destination.
As (bad) luck would have it, Neeley was logged into the ridesharing app, but was not responding to a call at the moment the accident occurred. Neither policy applied. Adding insult to injury for Neeley, both policies were from the same insurer: Liberty Mutual.
Saved by ambiguity
Robey Neeley’s case was just a collision claim, although a big one ($30,000 in damage). A month later, Lizbeth Ramirez barely escaped with compensation for injuries she sustained in an accident with a driver for the DoorDash delivery service.[2]
Again, the driver’s personal auto insurer (First Chicago) denied liability coverage on the basis of an exclusion for bodily injury or property damage “incidental to or emanating from” the operation of a vehicle for “delivery related business.” Again, the claimant turned to the service’s insurer, and was denied on the basis that the driver, who had completed his appointed deliveries, was not “actually fulfilling a delivery request.”
In a rather chilling development for a bodily injury case, a trial court ruled that both policy exclusions applied to bar coverage. Ramirez was saved, however, by a Wisconsin appeals court, which ruled that the driver’s personal auto policy exclusion was ambiguous in the circumstances.
Doubts about UM/UIM
Recent rulings also indicate that ridesharing and delivery drivers can’t be sure about their status under provisions for uninsured and under-insured motorists (UM/UIM) coverage.
UM/UIM coverage is complicated enough without factoring in ridesharing and delivery service use of personal vehicles. Some states require that UM and/or UIM coverage be provided with all auto liability policies, some require that it be offered subject to buyer acceptance or rejection, and a few don’t require it at all.
Restrictions on auto liability coverage for paid ridesharing and delivery use are likely to restrict the application of UM/UIM coverage, as well.
In December 2024, a Kentucky appeals court ruled that the state’s public policy promoting UM/UIM coverage could not be invoked to force a transportation network company (TNC) to provide UM/UIM coverage for its drivers. Despite the public policy preference, Kentucky law still allowed an insured to decline the coverage, as the TNC had done in this case.[3] A month earlier, a U.S. district court in Florida did essentially the same, ruling that Florida law did not require a TNC to provide UM/UIM coverage to its contract drivers.[4]
Are you a motor carrier?
There’s at least one factor that may work in favor of gig drivers as they seek insurance protection for their driving: whether their state regards TNCs as motor carriers, and thus subject to greater safety regulation and insurance requirements than other enterprises that use autos.
That made the difference in a Georgia case in 2024, in which a claimant was allowed to file a direct action against the liability insurer for a Lyft driver she was riding with when injured in an accident.[5] Claimants are typically barred from directly suing a defendant’s insurer, but Georgia law allows direct actions against motor carriers, and Lyft had been designated a motor carrier in the state.
Auto insurers have made a comprehensive effort over the past 10 to 15 years to adapt liability coverage to address the use of private autos for compensated livery and delivery service. These rulings suggest that there’s still work to do to clarify where coverage begins and ends.
[1] Neeley v. Lyft, Inc., No. 11-25-00065-CV (Tex. App. Feb. 12, 2026)
[2] Ramirez v. Voyager Indem. Ins. Co., No. 2024AP000786 (Wis. App. Mar. 10, 2026)
[3] Hayden v. Indian Harbor Ins. Co., 2023-CA-1133 (Ky. Ct. App. Dec. 20, 2024)
[4] Progressive Express Ins. Co. v. Monasterio, No. 24-11256 (11th Cir. Nov. 18, 2024)
[5] Barnes v. State Farm Fire & Cas. Co., No. A24A0852 (Ga. App. Aug. 26, 2024)/
The author
Joseph S. Harrington, CPCU, is an independent business writer specializing in property and casualty insurance coverages and operations. For 21 years, Joe was the communications director for the American Association of Insurance Services (AAIS), a P&C advisory organization. Prior to that, Joe worked in journalism and as a reporter and editor in financial services.
