Proposed N.J. bill would reduce insurance requirements for ride-share drivers
In New Jersey, some lawmakers are trying to change a law to reduce driver insurance requirements for ride-share services like Uber and Lyft.
The move would reduce the minimum uninsured motorist (UM) coverage from $1.5 million to as low as $35,000.
Supporters say it would cut costs, but critics warn the change could leave injured passengers with nowhere to turn.
Ride-share companies support the move
The proposed bill would lower the required uninsured motorist coverage for ride-share companies like Uber. The bill has been referred to the Senate Commerce Committee.
An Uber spokesperson told CBS News New York in a statement:
"New Jersey's highest in the nation $1.5 million [uninsured motorist/underinsured motorist] requirement – 30 times higher than for personal drivers and not even required for taxis – drives up insurance costs so dramatically that 31% of every Uber fare goes to insurers, which is why Uber supports legislation to lower these mandates and bring down prices for riders."
A Lyft spokesperson released the following statement:
"This common sense insurance reform aligns actual risk levels while maintaining strong protections for New Jersey riders and drivers. Current law imposes excessive coverage, which results in higher fares for riders and reduced earnings for drivers. This legislation would bring about responsible policy based on real-world data to right-size insurance requirements."
Concern about crash victims
Dashcam video from July 9, 2024, shows a van pulling out in front of an Uber in West Caldwell. Jake Simon was in the back passenger seat, and the crash left him with severe internal injuries.
"Yeah, it definitely became scary," he said.
Simon, who has autism, underwent multiple surgeries.
"It was heartbreaking. I didn't know what was going to happen," mom Babette Simon said.
Babette Simon said her son will never fully recover from the crash, and on top of that, medical bills have topped $300,000.
"A good portion of those bills were paid by Medicaid. What I am sitting with right now is about $50,000 worth of bills," she said.
Attorneys said the driver of the van involved in the crash had no insurance.
The Simon family's attorneys said if the proposed bill becomes law, the savings for drivers would come at a cost.
"They want to lower it to $35,000, which, in a case like this, wouldn't even pay the expenses on the case, let alone pay back Medicaid or compensate Jake for the injuries that he's suffered," lawyer Edward Capozzi said.
The Simon family is suing Uber and its insurance company for compensation related to those medical bills. The lawsuit is ongoing.
