Uber & Lyft Settlements — Period 1, 2, 3 Insurance Coverage Explained

PERSONAL INJURY LAW · SONG LAW FIRM COLUMN

Situation

Accidents involving Uber and Lyft — collectively Transportation Network Companies (TNCs) — hinge on which insurance layer applies at the moment of the crash, and that in turn depends entirely on the driver's app state. Song Law Firm's first move on every TNC case is to pin down the app state and the corresponding Period, because misidentifying the Period can swing a settlement by orders of magnitude.

Legal Concept

New Jersey codified the Period framework in the TNC Safety and Regulatory Act (N.J.S.A. 39:5H-1 et seq.):

• Period 0: App OFF — only the driver's personal auto policy applies
• Period 1: App ON, no request accepted — contingent liability (BI $50K/$100K, PD $25K)
• Period 2: Request accepted, en route to pick-up — full commercial liability $1.5M plus UM/UIM $1.5M
• Period 3: Passenger onboard — full commercial liability $1.5M plus UM/UIM $1.5M, including passenger-seat coverage

The framework matured after Uber and Lyft lost early coverage battles in California, New York, and Illinois, and New Jersey finalized it legislatively in 2017.

NJ Rules

Key TNC Act provisions:

• N.J.S.A. 39:5H-10: limits for Period 1, 2, and 3
• N.J.S.A. 39:5H-16: primary liability of Uber or Lyft toward passengers, pedestrians, and other drivers
• 2024 amendment: passengers who have paid tips or gifts remain within Period 3

Practical Response

Materials to secure as soon as a case opens:

• Official Uber or Lyft trip record (the app's "Trip History" plus a Preservation Request to the company's Legal department)
• The driver's personal auto policy (to map secondary coverage)
• The passenger's own UM/UIM policy (occasionally available)
• GPS, speed, and brake telematics (Uber Pro or Lyft Driver Hub data)
• Seat-belt usage records (dash-cam, EMS report)

Common Misunderstandings

• "Uber's policy automatically covers everything." Not in Periods 0 and 1
• "Any passenger is automatically Period 3." Tip/wait states need review
• "New Jersey limits are lower than California." As of 2026 the $1.5M limit matches CA and NY

Key Takeaways

• The Period dictates the settlement ceiling
• Preservation Requests to Uber/Lyft Legal must go out within 7 days
• Period 1 still carries contingent $50K/$100K/$25K
• Passengers should also evaluate their own UM/UIM for stacking

FAQ

• Q. I was a registered Uber driver but had family in the car when the crash occurred.
• A. That is Period 0. Uber's policy does not apply; only your personal auto policy responds.
• Q. A passenger requested me and canceled a minute later. The crash happened in between.
• A. Generally Period 2 — Uber's full $1.5M commercial liability applies. The trip record is decisive.
• Q. I was in another vehicle struck by an Uber. How do I claim?
• A. In Periods 2 and 3, Uber is primary within the $1.5M limit. In Period 1, the contingent $50K/$100K triggers first, with the driver's personal insurer as excess.

Disclaimer

This article provides general information about New Jersey and New York TNC accident law and is not legal advice. Representation by Song Law Firm begins only after a signed retainer. Outcomes depend on facts.