Key Takeaways
- Lyft cut insurance in Maryland from $1,000,000 to $125,000 during Period 2 — when a Lyft driver has accepted a ride and is on the way to pick the passenger up.
- The $125,000 figure is the absolute statutory minimum under Maryland Public Utilities Article § 10-405.
- Uber currently maintains the full $1,000,000 in Period 2 in Maryland. Lyft does not.
- Maryland’s pure contributory negligence rule and statutory damages cap make this reduction unusually consequential for accident victims.
- If you have been hurt in a Lyft-related crash in Maryland, contact Pinder Plotkin Legal Team at 1-888-844-5373 for a free consultation.
Table of Contents
If you ride with Lyft in Maryland, drive for Lyft in Maryland, or share the road with a Lyft driver in Maryland — and that’s most of us — there is a change you need to know about. Lyft has dropped its third-party liability insurance from $1,000,000 down to $125,000 during a specific (and very common) phase of every ride: the time when a Lyft driver has accepted your ride and is on their way to pick you up.
That is not a typo. The drop is 87.5%.
It is legal. It is intentional. And in Maryland — a state with some of the harshest injury laws in the country — it shifts a tremendous amount of risk away from a multi-billion-dollar corporation and onto regular people: passengers, pedestrians, other drivers, and the Lyft drivers themselves.
At Pinder Plotkin Legal Team, our entire practice is built around helping injured Marylanders. We’ve watched the rideshare insurance landscape shift since the day Uber and Lyft arrived in the state, and this most recent move by Lyft is, in our view, one of the most consequential changes we’ve seen. This article walks through exactly what changed, why Lyft made the decision, how Maryland law made it possible, and — most importantly — what it means for you if you are ever hurt in a Lyft-related crash.
We’re going to keep this in plain English. No jargon. No hedging. Just what you need to know.
Lyft Cut Insurance in Maryland: What Changed?
Lyft used to carry a $1,000,000 commercial liability policy any time one of its drivers was actively connected to a passenger — meaning from the moment the driver accepted the ride request all the way through dropping the passenger off. That policy covered injuries to passengers, pedestrians, other motorists, and property damage.
That coverage has now been split in two.
While a passenger is physically in the vehicle, Lyft still carries the $1,000,000 policy. That hasn’t changed.
While the driver is on the way to pick the passenger up, Lyft has reduced its third-party coverage to $125,000 Combined Single Limit — the absolute legal minimum allowed under Maryland law.
That “on the way to pick up” window is called Period 2 in rideshare insurance. It typically lasts anywhere from one to fifteen minutes per ride. Across Maryland’s roads, on any given day, thousands of Lyft drivers are in Period 2 right now — actively working for the platform, navigating using the Lyft app, often driving in unfamiliar neighborhoods, and frequently distracted by the very tool that put them there in the first place.
For 87.5% of Lyft’s prior coverage to disappear during that exact window is not a minor adjustment. It is a deliberate corporate decision that puts Maryland residents in a much weaker financial position when something goes wrong.
If you’ve already been hurt in a Lyft-related crash in Maryland, call Pinder Plotkin Legal Team for a free consultation at 1-888-844-5373. There is no fee unless we win your case, and the rules around rideshare coverage are complicated enough that you should not try to handle one of these claims alone.
How Rideshare Insurance Actually Works: The Four Periods
To understand what Lyft did, you need a quick primer on how rideshare insurance is structured. Every rideshare trip is broken into four operational phases, and each phase carries a different insurance picture. This framework was negotiated nationally between rideshare companies, state insurance regulators, and the National Association of Insurance Commissioners, and Maryland adopted it through statute.
Period 0 — App Off
The driver’s Lyft app is off. They are operating their vehicle as a private citizen. Only their personal auto insurance applies. Lyft has no involvement and no liability.
Period 1 — App On, Waiting for a Request
The driver has logged into the Lyft app and is available to accept rides but has not yet been matched with a passenger. Standard personal auto policies almost universally exclude this phase through what’s called a “livery exclusion” — once you turn the app on, your personal policy is no longer guaranteed to cover you. So Lyft provides contingent liability coverage at the statutory minimum: $50,000 per person, $100,000 per accident, and $25,000 for property damage. That is the same in both Maryland and the previous Lyft model.
Period 2 — Ride Accepted, En Route to Pickup
The driver has accepted your ride request through the Lyft app and is now driving to wherever you are. They are actively working for the platform. They are following Lyft’s navigation. They are doing exactly what Lyft pays them to do.
This is the phase Lyft changed. Until recently, Period 2 carried the same $1,000,000 coverage as Period 3. Now, in Maryland, it carries $125,000 — the bare statutory minimum.
Period 3 — Passenger in the Vehicle
Once the passenger physically gets into the car, Lyft restores the $1,000,000 commercial policy and adds uninsured/underinsured motorist protection. That coverage continues until the passenger steps out at their destination.
The reason Lyft has kept the full coverage in Period 3 is the same reason it dropped it in Period 2: in Period 3, there is a paying passenger inside the car, and the legal concept of a “common carrier” creates a heightened duty of care. Outside the vehicle — pedestrians, cyclists, other drivers — Lyft now treats it as a much smaller risk worth investing in.
Why Lyft Made the Cut
Lyft did not slash this coverage on a whim. It is the product of years of corporate strategy, lobbying, and actuarial analysis. There are three forces driving it.
1. Commercial Auto Insurance Premiums Have Exploded
Rideshare companies pay surplus-lines commercial insurers to underwrite their multi-state liability policies. Those premiums have climbed dramatically over the past several years, eroding what was already a notoriously thin profit margin in the rideshare business. Every dollar Lyft pays in premium is a dollar that cannot go to driver pay, rider discounts, or shareholder returns.
2. The “99% Argument”
Lyft has commissioned actuarial studies that found, in their own analysis, that more than 99% of personal auto claims settle for amounts below $100,000. From a pure cost-of-capital perspective, that means the top $900,000 of a $1,000,000 policy is rarely accessed but constantly funded.
Reducing the Period 2 limit to $125,000 — just above that $100,000 statistical threshold — allows Lyft to keep enough capacity to handle the vast majority of claims it would expect to see, while shedding the premium cost of the upper tranches that were almost never touched.
That math works beautifully for Lyft. It works much less well for the 1% of accident victims whose injuries exceed $125,000 — and those are the catastrophic cases. The traumatic brain injuries. The spinal cord injuries. The multi-vehicle pileups. The wrongful death claims. Exactly the cases where victims and their families need a strong policy the most.
3. National Lobbying: “Rideshare Insurance Reform”
Lyft has been openly lobbying state legislatures under the banner of a campaign it calls “Rideshare Insurance Reform.” The argument is that legacy state insurance requirements are outdated, drive up rider costs, and incentivize plaintiff-side litigation against rideshare companies. In California, Lyft has cited the passage of SB 371 as a win for this campaign.
Maryland did not need a new bill. Our state’s existing statute — Public Utilities Article § 10-405 — already permitted lower limits than what Lyft and Uber were voluntarily carrying. So Lyft simply stopped over-insuring. It pulled its actual coverage down to the legal floor.
How Maryland Law Made This Legal
To really understand the $125,000 figure, you have to understand the Maryland statute it’s pegged to.
When Maryland legalized rideshare operations in 2015 through Senate Bill 868, the legislature added a new section to the Public Utilities Article specifically governing Transportation Network Companies. That section — § 10-405 — sets the minimum insurance requirements while a driver is providing rideshare services in the state.
The statutory minimums during the active-but-no-passenger phase (Period 2) are:
- $50,000 per person for bodily injury
- $100,000 total per accident for bodily injury
- $25,000 per accident for property damage
That is a $50/$100/$25 “split limits” policy.
Lyft’s $125,000 Combined Single Limit is the mathematical aggregation of those numbers: $100,000 (the bodily injury cap) plus $25,000 (the property damage cap) equals $125,000. Instead of three separate buckets, Lyft now uses one unified pool. That gives Lyft more flexibility (the full $125,000 can be applied to a serious injury without being bottlenecked by the property damage cap) — and it gives Lyft confidence it is in full statutory compliance.
There is one more piece of Maryland law that makes this so consequential: § 19-517 of the Insurance Article. That section gives every personal auto insurer in Maryland the express right to exclude all coverage — and the duty to defend — any time a vehicle is being used to provide rideshare services. In other words, the moment the Lyft app is on and the driver is in Period 1, Period 2, or Period 3, the personal auto policy can legally walk away. There is no overlap. The TNC policy must answer first.
So in Period 2, the Lyft driver’s personal insurance is excluded by law, and Lyft’s coverage tops out at $125,000. That is the entire pool available to an injured person. Period.
“When clients first hear this, they don’t believe me. They assume that a company the size of Lyft must carry the kind of insurance that protects everyone on the road. The truth is, in Maryland, they’re now carrying the absolute minimum the law allows. People deserve to know that before something bad happens, not after.” — Jason Plotkin, Managing Attorney, Pinder Plotkin Legal Team
The Lyft vs. Uber Split: A Real Difference for Maryland Riders
What makes Lyft’s decision especially striking is that Uber, its direct competitor, has not followed suit. As of the most recent public disclosures we have reviewed, Uber continues to maintain its $1,000,000 commercial liability policy during both Period 2 and Period 3 in Maryland.
That means, on the same road, in the same crash scenario, with the same injuries, the available insurance can differ by $875,000 depending solely on which app the driver opened that morning.
Phase | Driver Status | Lyft (Maryland) | Uber (Maryland) |
|---|---|---|---|
Period 1 | App on, awaiting a request | $50K / $100K / $25K | $50K / $100K / $25K |
Period 2 | Ride accepted, en route to pickup | $125,000 CSL | $1,000,000 CSL |
Period 3 | Passenger in the vehicle | $1,000,000 CSL | $1,000,000 CSL |
If you are a Maryland rider deciding between platforms, or a Maryland driver deciding which app to work on, that is now a meaningful distinction. Same ride. Same risk profile. Wildly different financial protection if things go wrong.
We are not telling you to stop using Lyft. We are telling you that you should know what is — and isn’t — sitting behind that ride if you get hurt.
Already in a situation where a Lyft driver hit you or hit your car? Stop trying to figure out the insurance maze alone. We can help.
Maryland’s Tort Laws Make This Even Worse for Victims
Insurance limits alone don’t tell the full story. To really see the impact of Lyft’s reduction, you have to look at the broader Maryland legal landscape — because Maryland is already one of the most defendant-friendly states in the country for auto accident cases.
Contributory Negligence
Maryland is one of only a handful of jurisdictions — along with Virginia, Alabama, North Carolina, and the District of Columbia — that still applies the old common-law rule of pure contributory negligence. Under that rule, if you (the injured person) are found to be even 1% at fault for the accident, you recover nothing. Not a reduced amount. Nothing at all.
Most states use comparative negligence, where your recovery is reduced in proportion to your share of fault. Maryland does not. We are an “all or nothing” state.
That rule already gives insurance companies a powerful defense in every accident case. Now combine that with Lyft’s reduced Period 2 limit, and you have an environment where Lyft’s insurance carrier has every incentive to dig hard for any sliver of fault on the part of the injured party — because if they can establish even minor contributory fault, they pay zero, and the question of whether the policy was $125,000 or $1,000,000 becomes moot.
The Non-Economic Damages Cap
Maryland law also places a hard statutory cap on non-economic damages — things like pain, suffering, emotional distress, and loss of enjoyment of life. As of October 1, 2025, that cap sits at $965,000 and increases by $15,000 each October.
Economic damages — medical bills, lost wages, future care costs — are not capped. But the cap on the human, subjective part of a claim means that even the most catastrophically injured victims face a ceiling on what they can recover for the non-financial impact on their lives.
Why This Combination Matters
When you put the pieces together, what you have is a state where:
- The injured person can be entirely barred from recovery by a 1% fault finding.
- The non-economic portion of a verdict is capped by statute.
- And now, during a high-volume operational phase, the most accessible deep-pocket — the Lyft commercial policy — has been compressed by 87.5%.
For Lyft’s actuaries, that’s an attractive risk profile. For Maryland accident victims, it is a much harder road than it was a year ago.
What Happens When the Coverage Runs Out
Let’s walk through a real-world scenario.
A Lyft driver in Towson accepts a ride request and starts driving to a pickup location. While glancing at the Lyft app to confirm the route, the driver runs a red light and broadsides another car carrying a family of three. Two of the passengers are seriously injured. Medical bills, lost wages, and future care needs combined come to $400,000.
In that scenario:
- The Lyft driver’s personal insurance can lawfully exclude the claim under Maryland Insurance Article § 19-517, because the driver was providing rideshare services when the crash happened.
- Lyft’s Period 2 policy pays out — but only up to $125,000 total, across all victims and all property damage.
- The Lyft driver personally is now on the hook for the remaining $275,000. That can mean a judgment against their wages, their home, their savings — anything not protected by Maryland’s exemption rules.
- The injured family is forced to look to their own uninsured/underinsured motorist coverage, if they have it, to try to make up the gap. Their own insurer is paying for a crash caused by an actively working Lyft driver.
That is not a hypothetical edge case. It is the predictable mechanical result of Lyft’s policy change combined with Maryland’s existing law. And it is going to happen, repeatedly, to Maryland families.
“The hardest conversations I have are when someone is sitting across from me with a stack of medical bills, and the at-fault party doesn’t have enough insurance to cover them. With this Lyft change, those conversations are about to happen a lot more often in Maryland — and most people will never see it coming.” — Jason Plotkin, Pinder Plotkin Legal Team
What This Means for Lyft Drivers
If you drive for Lyft in Maryland, this change is not just bad news for the people you might accidentally hit. It is bad news for you, personally.
In Period 2, you are operating as an independent contractor providing services for Lyft. Your personal auto insurance is legally allowed to deny the claim. Lyft’s coverage now stops at $125,000. If you cause a serious accident, every dollar of damages above $125,000 can come straight out of your pocket.
Some practical realities to understand:
- Buy a rideshare endorsement. Most major Maryland insurers — GEICO, USAA, State Farm, Allstate, Erie, and others — offer a rideshare endorsement that adds coverage during Period 1 and Period 2. It is one of the smartest small monthly investments you can make if you’re driving for any rideshare platform.
- Look at your UM/UIM limits. Uninsured/underinsured motorist coverage on your personal policy is what protects you from drivers who don’t have enough insurance to cover your injuries. Maryland law requires a minimum, but the minimum is far below what most working adults actually need.
- Don’t assume the platform has your back. Lyft’s decision to bring its coverage down to the statutory minimum is itself a statement about how the company is thinking about its responsibility to its driver community.
If you are a Lyft driver in Maryland who has been involved in a crash — whether the other driver caused it or you did — call us. The questions about coverage, exclusions, and how to protect yourself personally are exactly the questions we walk drivers through every week.
What to Do If You’re Hurt in a Lyft-Related Crash in Maryland
Whether you are a passenger, a driver, a pedestrian, a cyclist, or another motorist, this is the action list we’d give a family member.
1. Get safe and get medical attention.
Move to a safe location if you can. Call 911. Accept transport to the hospital if it is offered. Many injuries — especially soft tissue, concussion, and internal injuries — feel mild in the first few hours and worsen significantly in the days that follow. A documented ER visit creates the medical record that later supports your claim.
2. Document everything before you leave the scene.
Take photos of all vehicles involved, the scene, the road, any visible injuries, license plates, and any debris. Get the names and contact information of every witness. Wait for the police to arrive and get the report number.
3. Confirm the rideshare status — and screenshot it.
This is the single most overlooked step. If you were the Lyft passenger, screenshot your ride within the Lyft app — the driver’s name, the pickup time, the drop-off destination, the receipt. If you are not the passenger but you suspect the at-fault driver was logged into Lyft, ask the driver and write down what they tell you. The difference between Period 1, Period 2, and Period 3 — and therefore the size of the policy that applies — turns on this information.
4. Don’t give a recorded statement to any insurance company before talking to a lawyer.
You will likely get a call within 24-72 hours from the rideshare company’s insurer or the driver’s personal insurer. They will be professional. They will sound friendly. Their job is to limit what the policy pays. In a Maryland contributory negligence state, a single off-the-cuff comment about what you did or didn’t do can be used to defeat your claim entirely.
5. Keep a daily symptom and disruption journal.
Write down what hurts, what you couldn’t do today that you could do before, the appointments you went to, and the work you missed. This becomes powerful evidence later — especially for non-economic damages, which are often the most contested part of a claim.
6. Call a Maryland personal injury attorney who handles rideshare cases.
This is where we’d point you to us — but the broader truth is that rideshare cases are not a generic auto accident claim. The interaction between personal policies, livery exclusions, the four operational periods, the new Lyft policy structure, and Maryland’s contributory negligence rule creates a uniquely complicated case. You want a lawyer who has handled them before and who knows which questions to ask in the first 48 hours.
The free consultation is exactly what it sounds like: free. There is no obligation. If we are not the right firm for your case, we’ll tell you that and point you in the right direction.
A Word on Why We Wrote This
We don’t write a blog every time an insurance company adjusts a policy. We wrote this one because the people most affected by Lyft’s decision have almost no way of knowing it happened. There was no press conference. There was no notification to riders. There was no warning to drivers. The change shows up only in the legal fine print of Lyft’s insurance disclosures and the actuarial filings reviewed by state regulators.
Meanwhile, every day, thousands of Maryland residents climb into a Lyft, drive for Lyft, or share the road with a Lyft driver — under the assumption that a company that big has the kind of insurance behind it that everyone expects from a company that big.
That assumption is no longer accurate during a huge portion of every Lyft trip in Maryland. We think people deserve to know that. And if you are someone who has already been hurt in a Lyft-related crash and you are reading this — please, do not try to navigate the next 90 days alone.
How Pinder Plotkin Legal Team Can Help
We are a Maryland personal injury firm. Auto accidents, including rideshare accidents, are at the core of what we do. We’ve been representing injured Marylanders for years through every kind of crash scenario — and we treat every client the way we’d want a member of our own family to be treated.
Here is what working with us looks like:
- Free consultation. No cost, no pressure, no obligation. We’ll listen to what happened, walk you through your options, and tell you straight whether we think you have a case.
- No fee unless we win. Personal injury cases at Pinder Plotkin are handled on contingency. You pay nothing up front, and we are only paid if and when we recover money for you.
- One team handling everything. We have a dedicated litigation team, a workers’ compensation team for on-the-job injuries, a client experience coordinator who keeps you informed at every stage, and a managing attorney — Jason Plotkin — who personally oversees the firm’s quality of care.
- Local Maryland focus. We know Maryland courts, Maryland adjusters, Maryland traffic patterns, and Maryland’s specific legal rules. That local knowledge matters more than most clients realize.
How to Reach Us
Call 1-888-844-5373 for a free consultation. Three Maryland offices: Baltimore (4300 Ridge Rd., 21236), Laurel (329 Prince George St., 20707), and Bel Air (121 Archer St., 21014).
About the Author — Jason Plotkin, Esq.
Jason Plotkin, Esq. is the CEO and Managing Attorney of the Pinder Plotkin Legal Team, a Maryland personal injury and workers’ compensation firm serving Maryland clients since 2002. A life member of the Million Dollar Advocates Forum — a distinction held by fewer than 1% of U.S. attorneys — Jason has been selected to Maryland Super Lawyers every year from 2020 through 2026 and is a current member of the National Trial Lawyers Top 100. In 2021, he received Clio’s inaugural Legal Impact Award. Jason is the best-selling author of Crash Course: To Recovery and Beyond (2024), draws on his own experience surviving two serious auto accidents, and teaches continuing legal education through the National Business Institute — including the CLE course Uber, Lyft and Liability: Handling Rideshare Injury Cases. J.D. with honors, Syracuse University College of Law. Maryland Atty ID: 0612130217.
If you’ve been hurt — in a Lyft, in any car, at work, or by an animal — Jason and the team at Pinder Plotkin Legal Team are ready to help.
Disclaimer: This article is for general informational purposes only and is not legal advice. Reading it does not create an attorney-client relationship. Insurance coverage limits, statutes, and case law referenced are accurate to the best of our knowledge as of the date of publication and are subject to change. If you have been injured, please consult with a licensed Maryland attorney about the specific facts of your situation.
