It was the first fatal crash in the history of the 2½-year-old San Francisco company, which lets passengers use a smartphone app to summon paid rides by “community drivers” in their personal cars.
Lyft, as well as rivals Uber and Sidecar, have come under intense scrutiny over whether their insurance coverage is adequate, as it varies depending on whether a driver has been “matched” with a passenger.
The accident involved several cars, which means it could take weeks or months to determine who was at fault, said Chad Hertzell, a California Highway Patrol officer.
The Lyft driver, Shanti Adhikari, 31, of Sacramento, was traveling at 60 mph when he swerved to avoid a stalled Kia in the middle lanes and lost control of his 2014 Toyota Camry, Hertzell said. The Lyft car hit a tree, spun and hit another tree. That collision killed Holland, who was sitting in the left rear seat. The Kia had been rear-ended by a vehicle that left the scene; other cars also struck the Kia while it was disabled. Holland’s father told a local TV station that his son was returning from a Halloween party with his boyfriend.
While a driver is providing a ride or on the way to pick up a passenger, Lyft offers $1 million in liability insurance, and $1 million in uninsured/underinsured motorist coverage. That coverage, which once was “excess” — kicking in only after a driver’s personal auto policy had been exhausted — became primary coverage in July.
Personal auto insurers complain that their policies are not designed to cover commercial activities, such as the paid rides provided by Lyft and UberX drivers.
“Lyft’s $1 million liability policy, which includes uninsured/underinsured liability coverage, is designed to provide coverage for Lyft drivers to protect passengers and third parties in unfortunate and tragic accidents such as this one,” spokeswoman Erin Simpson said.
Experts said that Lyft’s policies appear to be structured so they will cover this accident, no matter who is found to be at fault.
“If the Lyft driver was at fault, then the $1 million liability policy should cover the accident,” said Kara Cross, general counsel of the Personal Insurance Federation of California, while cautioning that she had not seen the policy.
“If someone else was at fault and they were not insured or their limits were not adequate to cover the accident, then Lyft’s $1 million uninsured/underinsured motorist coverage should apply.”
California only requires motorists to carry at least $30,000 for injury or death to multiple people.
“When you have an accident with a death, presumably the damages will be more than the limits in California, so then (Lyft’s) uninsured motorist coverage will cover it,” Cross said.
California legislators recently passed a bill to require coverage when a driver is logged into the companies’ apps but hasn’t yet been matched with a passenger. The mandated coverage, set to take effect July 1, would top off at $200,000.
That period — when a driver is available to work but hasn’t received a ride request — has spawned a host of concerns about an “insurance gap.” An UberX driver hit and killed 6-year-old Sophia Liu and injured her mother and brother in San Francisco on New Year’s Eve, reportedly while he was logged into the UberX app and awaiting ride requests. The driver’s personal policy had only the California minimum coverage, according to the Liu family lawyer, Christopher Dolan. Her family is suing Uber for wrongful death.
©2014 the San Francisco Chronicle
