Recovering Compensation After an Accident Under Lyft’s New Policy Agreement

Posted on behalf of Pfeifer Morgan & Stesiak

on June 29, 2021

. Updated on April 18, 2022


Man holding phone with rideshare app openPassengers, pedestrians and other drivers who are injured by negligent Lyft drivers may be barred from filing a lawsuit against the company to recover compensation. Lyft updated its terms of service agreement on April 1, 2021, and anyone who uses the app waives their right to file a lawsuit – they must resolve the dispute through binding arbitration.

Unfortunately, binding arbitration tends to favor the companies that mandate it. That means it may be more difficult to recover full compensation, particularly if the Lyft driver’s insurance coverage runs out.

If you were injured by an uninsured/underinsured Lyft driver and do not know how to go about getting the compensation you need, call our South Bend car accident lawyers today to learn about your legal options.

What is Lyft’s New Policy Agreement?

As of April 1, 2021, people who continue to use the Lyft app have agreed to waive their right to file a lawsuit against the company if any type of dispute arises. Instead, users agree to resolve civil disputes through binding arbitration. Under this new agreement, Lyft is also waiving its own right to file suit. Additionally, all disputes must be resolved on an individual basis, and not as part of a class action.

The laws that govern how the arbitration is handled are set forth by the Federal Arbitration Act unless it is inapplicable for any reason. In these instances, arbitration is governed by the laws of the state of Delaware.

All arbitration hearings will be held in the county of your billing address if you are a rider.

Are There Exceptions to the Arbitration Agreement?

Lyft’s new agreement does allow claims to be brought against the company in small claims courts. In Indiana, claims that do not exceed $6,000 can be taken to small claims court. South Bend residents can file a claim in St. Joseph County court. Small claims may only be brought on an individual basis.

How Do I File a Claim?

Indiana is an at-fault state, which means if you were injured due to someone else’s negligence, you file a claim through the at-fault driver’s liability insurance. This works the same way if you were a passenger in a Lyft vehicle or if you are a driver who was injured by a Lyft driver.

Every Lyft driver is required to carry a minimum amount of insurance, according to the law of their state. In Indiana, drivers must carry:

  • Bodily injury liability: Minimum of $25,000 per person and $50,000 per accident
  • Property damage liability: Minimum of $25,000 per accident
  • Uninsured motorist bodily Injury: Minimum of $25,000 per person and $50,000 per accident

Lyft drivers are also required to have a ridesharing endorsement from their own insurance company, so that any claims for damages arising from an accident may be brought against the driver’s personal insurance and not Lyft’s insurance policy. This generally makes the process of filing a claim more straightforward since your case would be against the driver and not Lyft.

Unfortunately, there are some instances when your damages may exceed the Lyft driver’s insurance limits. At this point, Lyft may be liable to cover the rest of your medical bills, lost wages and other damages. You would need to file a claim with Lyft’s liability insurance.

When Can I File a Lawsuit?

If you continue to use Lyft’s services after April 1, 2021, you agree to its new terms of service. That means that you have completely waived your right to file a lawsuit against the company and have agreed to resolve any disputes for damages above $6,000 through binding arbitration.

However, since the Lyft driver’s insurance is the primary liability policy through which you would file your injury claim, you may be able to file a lawsuit if they are refusing to negotiate or accept liability for your damages.

Need Help Filing a Claim with Lyft? Call Us Today

While the process may be different depending on the situation, victims of car accidents have the legal right to pursue compensation. This holds true even if the person who caused the accident was a Lyft driver.

Since Lyft’s new policy agreement requires any claims brought against them to be resolved through binding arbitration, it is important that you consider speaking to an experienced lawyer who may be able to help you through this complex process.

Our attorneys have decades of experience handling all sorts of injury claims and are prepared to help you pursue the compensation you need.

The consultation is free and there are no fees while we work on your case.

Call us today at (574) 444-0741

Pfeifer, Morgan & Stesiak

Serious Attorneys for Serious Cases