Published by The Pellegrin Firm December 13, 2019

In a ruling dated November 27, 2019, the Louisiana Fourth Circuit Court of Appeal in New Orleans affirmed a district judge’s decision to grant summary judgment for Progressive Insurance Company in the case of a Lyft driver seeking underinsured motorist coverage though his wife’s policy, which covered him as a resident relative of her household. At the time he was hit by an underinsured driver, the plaintiff was logged onto the Lyft application looking for a passenger near the New Orleans Convention Center. The court of appeal enforced the exclusion in the Progressive policy for insureds engaged in rideshare services, rejecting the plaintiff’s argument that the exclusion is unenforceable as a violation of public policy.

The plaintiff argued that Lyft and Uber drivers are in an impossible position. Louisiana law favors underinsured/uninsured motorist coverage and requires strict formal requirements for the rejection of said coverage when purchasing car insurance. However, the Louisiana Legislature has allowed rideshare companies like Uber and Lyft to reject underinsured/uninsured motorist coverage on their drivers’ behalf on the insurance that covers the drivers while in active service. Likewise, in passing La. R.S. 45:201.7 in 2015, the legislature allowed car insurance companies to exclude underinsured/uninsured motorist coverage for insureds engaged in rideshare services. Coupled together, these provisions will have the practical result of leaving most if not all rideshare drivers without underinsured/uninsured motorist coverage while they are on the job.

Ultimately, the court of appeal found it couldn’t override the clear statement of the legislature. The court argued that a rideshare driver could negotiate with the rideshare company for proper insurance coverage while on the job or purchase a private underinsured/uninsured motorist policy that covers him/her during rideshare operations. It is not clear how realistic either of these propositions are considering the bargaining positions of the respective parties. The case is Crowley v. GoAuto Insurance Company et. al., docket number 2019-CA-0643 in the court of appeal.