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Uber offers low quality, risky insurance instead of workers' comp

The first page of Uber's new insurance meant to cover drivers' injuries says "THIS INSURANCE IS NOT WORKERS' COMPENSATION INSURANCE."

And it's not, according to the Intercept. First of all, unlike workers' compensation insurance, Uber's plan is optional and paid by the driver. Workers' comp is typically mandatory and paid by the employer. Second, the Intercept points out, it's not good insurance. Major problems include:

Uber's policy maxes out at half the driver's average weekly earnings, whereas in North Carolina (like most states), the workers' comp wage replacement rate is higher -- two-thirds of a worker's average wage up to $978 per week.

Under Uber's policy, the insurance company has the right to deny coverage at its doctors' discretion. Under workers' comp, the state WC board makes final decisions about coverage.

If disputes arise about treatment or coverage, Uber drivers have to explicitly give up their right to appeal before a workers' comp board and are required to go through binding arbitration. A workers' comp board, which is typically made up of both business and labor representatives, would offer a fair public forum with specific rules. Those with workers' comp have access to court appeals, too.

Driving is a dangerous occupation, so going without insurance makes little sense

Although the Bureau of Labor Statistics doesn't break out Uber driving as an occupation, it does follow injury rates for taxi drivers and chauffeurs. Unfortunately, taxi drivers are as likely to miss work due to an on-the-job injury as miners and loggers. They're more likely to be injured than police.

Taxi drivers are entitled to workers' compensation. Uber hadn't made a plan for its drivers' injuries until just about a month ago. This is likely because the company has been fighting in state after state to have its workers classified as independent contractors. That classification prevents Uber from having to pay many different types of benefits.

If Uber isn't paying, who is? Drivers who are injured typically rely on their own health insurance to cover their treatment -- and insurers may not be happy left holding the bag. Until this voluntary insurance was rolled out recently, they had no wage replacement -- way to pay their expenses if they couldn't work.

We recommend reading the entire piece in the Intercept, which contains more detail about the plan. Until then, we recommend considering very carefully if you can afford to be injured while driving for Uber.

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