What To Do When Insurance Denies a Car Accident Claim Because the Other Driver Hid They Were Driving for a Rideshare Company

Rideshare driving (Uber, Lyft, and similar services) has made it easy to earn extra income, but it has also created complicated gaps in insurance coverage. When an at-fault driver fails to disclose that they were driving for a rideshare service and their insurer denies a claim, injured people and their lawyers face a tricky legal puzzle: whose coverage applies, what defenses the insurer can use, and what paths remain to secure compensation. In this blog, we explain how and why denials like this happen in Illinois, what your options are, and practical steps you can take to protect your injury claim.

“As rideshare driving grows, the insurance issues grow more complex. If your claim is denied because the other driver hid their rideshare activity, you need someone who understands how to get app logs, press the companies, and push back on improper rescission or denials. Don’t let a coverage technicality stand between you and the compensation you deserve.” — John J. Malm, Naperville car accident attorney

How Rideshare Insurance Usually Works

Rideshare platforms and insurers divide a driver’s activity into distinct periods, and coverage depends on which period the driver was in when the crash occurred:

• App off: driver not logged into the rideshare app: the driver’s personal auto policy is typically primary.
• App on, no passenger accepted: driver logged in and waiting for requests: rideshare companies typically provide limited liability that may step in if the driver’s personal policy excludes commercial use.
• App on, passenger onboard or en route to pick up: full rideshare commercial coverage (often including higher third-party liability limits, and sometimes UM/UIM protections).

Uber and Lyft publish these coverage frameworks on their sites and in their insurance explanations. The practical effect is that coverage can shift depending on whether the company recognizes the driver as “on duty.”

Why Insurers Deny Claims When Drivers Don’t Disclose Rideshare Use

Most standard personal auto policies contain an exclusion or premium difference for “business use,” “commercial use,” or “driving for hire.” If an insured represents (or the application states) the vehicle is for personal use only, but the driver actually uses it to carry paying passengers, the insurer may argue:

• Material misrepresentation or omission: the insured failed to disclose a fact the insurer relied on in issuing the policy; and
• Policy exclusion for commercial use: the insurer relies on express language excluding coverage while the vehicle is used for rideshare activity.

Under Illinois practice, insurers may try to rescind a policy or deny coverage for that reason. But rescission is not automatic, as courts examine whether the insurer waived rescission rights or delayed too long in asserting them.

What That Denial Looks Like For an Injury Victim

If you were injured in a car accident by a driver whose personal insurer denies coverage because of undisclosed rideshare driving, you can face one or more of these messy realities:

• The at-fault driver’s personal insurer refuses to pay.
• The rideshare company (Uber/Lyft) may disclaim coverage if the driver wasn’t logged in or wasn’t in a covered period.
• The injured person may need to rely on their own uninsured/underinsured motorist (UM/UIM) coverage, sue the at-fault driver directly, or pursue other available defendants (e.g., another negligent motorist).

Practical Options After a Car Accident Claim Denial

If an insurer denies a claim because the driver failed to disclose rideshare driving, here are the main legal avenues to explore:

• File a lawsuit against the at-fault driver: you can sue the driver for negligence (injuries, medical bills, lost wages, pain and suffering). A lawsuit allows discovery to investigate whether the driver actually was on the app, whether Uber/Lyft coverage should apply, and whether the insurer properly denied coverage.
• Press the rideshare company for its insurance: if the driver was logged into the platform in a period giving rise to company coverage, Uber/Lyft may be the deep-pocket insurer. Their policies and the company’s claim handling are often disputed and require proof (logs, GPS, dispatch records) that the driver was in a covered period.
• Use your own UM/UIM coverage: if available, your uninsured/underinsured motorist coverage can pay medical bills and related losses when the at-fault party lacks valid coverage. You can later pursue subrogation if another insurer or defendant is found liable.
• Challenge the insurer’s rescission or denial: insurers must comply with statutory timing and proof rules when seeking rescission for misrepresentation; courts may find the insurer waived the right to rescind if it waited or behaved in a way inconsistent with rescission.

Evidence That Matters in Denied Claims

When a claim is denied because the driver hid rideshare driving, discovery and investigation focus on proving the driver’s status at the crash:

• App metadata and server logs from Uber/Lyft (time logged in, ride requests, GPS traces)
• Cell phone records and app timestamps
• Witness statements (passengers, other drivers)
• Video (dashcam, street cameras, traffic cams)
• Insurance application and renewal documents (what the insured actually told their auto company)
• The rideshare company’s claim file, if any

Collecting the app/server logs is especially important. The platforms keep detailed timestamps that can show whether the driver was “on duty.” If the rideshare company refuses to produce them voluntarily, a court subpoena during litigation may be required.

Common Defenses Insurance Companies Raise

Insurers and rideshare companies commonly make these defenses:

• “App was off” or “driver was not on duty”: plaintiffs counter with app logs, phone GPS, or witness statements showing the driver was actively waiting for or on a ride.
• “Policy exclusion for commercial use”: plaintiffs attack whether the exclusion actually applies, whether the insurer knew of or accepted rideshare activity previously, or whether rescission was timely and permitted.
• “No coverage available from the company”: plaintiffs dig into the rideshare company’s own thresholds for coverage and the specific facts (e.g., driver accepted a ride, en route to pick up, or carrying a passenger).

Practical Advice if You’re the Injured Victim

• Preserve evidence immediately. Write down witness names and contact info, take photos of the scene, get medical attention, and save any texts or communications you received about the accident.
• Make a full, written demand to the at-fault driver’s insurer and the rideshare company. Put them on notice early and ask for app logs and claim files.
• Consider using your UM or MedPay coverage to cover immediate bills while you investigate other avenues.
• Talk to an attorney experienced in rideshare litigation. These cases require technical proof (app/server logs, metadata) and aggressive litigation strategy to get the records you need.

Frequently Asked Questions About Car Accident Claim Denials

Q: Can an insurer cancel or rescind a policy because the driver took rideshare trips?
A: Yes, insurers can seek rescission or deny coverage for material misrepresentations or omissions (like failing to disclose commercial use).

Q: If the personal insurer denies the claim, does Uber or Lyft automatically pay?
A: Not automatically. The rideshare company’s coverage applies only during certain periods and under their policy rules. Whether Uber/Lyft pays depends on whether the driver was in a covered period (logged in, accepted a ride, passenger onboard) and the company’s own claim determination.

Q: What if the rideshare company says the app was off?
A: Don’t accept that at face value. Ask for the platform’s logs and the driver’s app/GPS data. An experienced lawyer can subpoena those records if the company refuses.

Q: How long do I have to sue in Illinois?
A: For most car-accident personal injury claims in Illinois, you generally have two years from the date of the crash to file suit. Missing that deadline can bar your lawsuit.

Contact the Top-Rated Illinois Car Accident Lawyers at John J. Malm & Associates

If your car accident claim has been denied because the at-fault driver failed to disclose they were driving for Uber, Lyft, or another rideshare company, you should not have to shoulder the financial burden of their dishonesty. These cases are complex and require an attorney who understands both Illinois insurance law and the unique challenges of rideshare accident claims. At John J. Malm & Associates, we have the knowledge and resources to investigate coverage disputes, demand accountability from insurers, and fight for the compensation you deserve. Don’t wait until valuable evidence is lost or deadlines expire, contact our office today for a free consultation and let us stand up for your rights.