Attorneys Litigating Ridesharing Vehicle Accidents Should Be Familiar With N.J.S.A. 39:5H-10

Soon after launching in 2009 and 2012 respectively, Uber and Lyft became preferred modes of transportation for individuals who lived or worked in areas not served by public transportation or taxis, as well as those who were well-served by either or both but still preferred to use a ridesharing service. Today, designated ridesharing zones at airports, stadiums, condominium and apartment complexes, and other locations show just how ingrained Uber, Lyft, and other lesser-known ridesharing companies have become in our everyday lives.

In 2023, Uber and Lyft provided 9.4 billion and 709 million rides, respectively, across the world. With that many automobile rides, accidents are inevitable. When attorneys are litigating an automobile accident involving a ridesharing vehicle that took place in New Jersey, they should be aware of special insurance provisions regarding those vehicles that are mandated by New Jersey statute.

N.J.S.A. 39:5H-10 addresses insurance coverage for ridesharing companies and their drivers

N.J.S.A. 39:5H-10 requires that (i) a rideshare driver using their personal vehicle to provide rides for a ridesharing service, (ii) a ridesharing service (referred to in the statute as a “transportation network company”), or (iii) any combination of the two, maintain minimum insurance coverage limits.

The statute provides two sets of minimum limits. One is for when a driver is logged into a ridesharing platform, signifying their availability to accept rides. The other is for when the driver is en route to picking up a passenger or has picked them up and is transporting them.

When a ridesharing driver is merely logged into a ridesharing platform, but is not en route to a passenger or transporting a passenger, the statutorily required minimum insurance limits are:

(1)       primary automobile liability insurance in the amount of at least $50,000 for death or bodily injury per person, $100,000 for death or bodily injury per incident, and $25,000 for property damage;

(2)       primary personal injury protection benefits (PIP) that provide coverage amounts selected pursuant to section 4 of P.L.1972, c.70 (C.39:6A-4); and

(3)       uninsured and underinsured motorist coverage to the extent required pursuant to section 2 of P.L.1968, c.385 (C.17:28-1.1).

When a ridesharing driver is en route to a preassigned passenger or is transporting a passenger, the statutorily required minimum insurance limits are:

(1)       primary automobile liability insurance in the amount of at least $1,500,000 for death, bodily injury, and property damage;

(2)       primary automobile insurance for medical payments benefits in an amount of at least $10,000 per person per incident, which shall only apply to and provide coverage for the benefit of the rideshare driver; and

(3)       uninsured and underinsured motorist coverage in an amount of at least $1,500,000.

If there is a lapse in a rideshare driver’s insurance coverage, or their coverage does not meet the statutory minimum, the statute requires their ridesharing service’s insurance to provide the required coverage “beginning with the first dollar of a claim.” The ridesharing company will also have the duty to defend the claim.

In addition, N.J.S.A. 39:5H-10(e) clarifies that coverage under an insurance policy maintained by a ridesharing company shall not depend upon a private passenger automobile insurer first denying a claim. The provision also does not require such an insurer to deny a claim first.

N.J.S.A. 39:5H-10(j) addresses the Verbal Threshold/Limitation on Lawsuit option, codified at N.J.S.A. 39:6A-8, which provides New Jersey consumers the option to select a lower automobile insurance premium in exchange for limiting their rights to seek damages arising out of an automobile accident that injured them. N.J.S.A. 39:5H-10(j) prohibits a ridesharing company or its drivers from asserting that limited right against an individual injured in an accident while in a ridesharing vehicle, including those not receiving personal injury protection benefits.

The enhanced insurance requirements under N.J.S.A. 39:5H-10 provide protection not only to passengers in ridesharing vehicles but also to injured parties in other vehicles involved in an accident with a ridesharing vehicle.

If a ridesharing driver was not responsible for causing an accident, their passenger will be subject to the liability insurance limit of the responsible driver and automobile. That said, the passenger will also be protected by the minimum ridesharing company UM/UIM limit of $1,500,000.

N.J.S.A. 39:5H-10 in action

N.J.S.A. 39:5H-10 provides ridesharing passengers as well as the public greater protection in the event of an automobile accident involving preassigned rides through ridesharing services.

When litigating an automobile accident involving a ridesharing service driver, it is common practice for plaintiffs’ counsel to join as defendants both the driver and the ridesharing service itself. This is usually followed by a request by defense counsel to dismiss the ridesharing service because the insurance coverage is adequate. But plaintiffs’ counsel should not be so quick to agree to that request.

For one, the coverage may not be adequate if the injuries are catastrophic. Second, there may be multiple claimants, which could render the coverage inadequate. Third, if the rideshare driver is merely logged into the system, the coverage per person is only $50,000.

Additionally, plaintiffs’ counsel should also weigh the need to allege respondeat superior liability on the part of a ridesharing company if the coverage required by N.J.S.A. 39:5H-10 is inadequate. Though this area of the law is evolving, in September 2022, Uber and a subsidiary paid the New Jersey Department of Labor and Workforce Development’s Unemployment Trust Fund $100 million after an audit revealed the companies improperly classified hundreds of thousands of drivers as independent contractors. Thus, in the appropriate case, it may be advisable to assert a cause of action against a ridesharing company under a theory of respondeat superior.

Though it was enacted in 2017, I’ve been surprised by how many attorneys—on both sides of the aisle—are unaware of N.J.S.A. 39:5H-10 and its provisions. Given that the number of rides we as a society take through ridesharing services is unlikely to materially decrease soon, all attorneys who litigate automobile accidents should familiarize themselves with N.J.S.A. 39:5H-10 so they can better protect their clients.

Michael F. Lombardi is the managing attorney of Lombardi & Lombardi, P.A., a leading New Jersey personal injury, criminal defense, and employment law firm effectively representing the legal needs of its clients since 1975. He can be reached at michaell@lombardiandlombardi.com.