Rideshare Insurance Coverage

What Is Rideshare Insurance?

When you work for companies like Uber and Lyft, rideshare coverage adds to your auto insurance. However, this is only true until you take a ride request. The ridesharing company will care for you once you agree to a ride.

When you work as a rideshare driver, the link between personal car insurance (which is what most drivers have) and commercial car insurance gets more complicated. Insurance companies had to make up entirely new rules and laws to work with companies like Uber and Lyft. "Rideshare coverage" is the name for this type of car insurance, and you can buy it as an add-on, also called an endorsement, from most insurance companies.

How Does Rideshare Car Insurance Work?

When you have the Uber or Lyft app open and are waiting for a request, your insurance only covers a small portion of the trip. You get more comprehensive security when you accept a ride and start carrying people.

When you work for a rideshare company, your insurance and their insurance work together like this:

• Period 0 - The app is off. Your policy covers you.
• Period 1 - The app is open, and you're ready for a ride request. If your policy covers ridesharing, or if you have a business policy, you're covered. Your rideshare employer's insurance only covers liability, which means it will pay for accidents and damage you cause.
• Period 2 - The request was granted, and you're now on your way to pick up a passenger. Your protection for Uber or Lyft is still valid.
• Period 3 - There are people in the car with you. Your protection for Uber or Lyft is still valid.

Now that you've dropped off your client, turn on the app and wait for a new ride. The insurance your rideshare employer has on file only covers liability now. If you don't have extra rideshare coverage or a commercial policy, your personal car insurance won't cover you.

Uber and Lyft will pay for any harm you cause to others or their property while driving. The ridesharing company will only pay for damage to your car caused by an accident if your policy has comprehensive collision insurance, also known as "full coverage."

If you damage your car while carpooling and have full coverage, you must pay Lyft or Uber's deductible first. This is your share of the repair costs. There is a $2,500 deductible for both businesses.

What's Different about Rideshare Insurance?

Because you are a ridesharing driver, your insurance company can't cancel your policy because of it. Ridesharing coverage also protects you while you wait for a ride request. Most people who drive have insurance on their cars for personal use. You might need a more expensive commercial policy if you use your car for work, as rideshare drivers do. What they cover and how much they cost are very different between business insurance and personal use insurance. You need to ensure you get the right insurance if you want to stay covered and have your claims paid by your insurance company.

Why Do Uber and Lyft Drivers Need Rideshare Insurance?

It is against the rules for most big insurance companies to let you use your car insurance for business. You need taxi insurance if you drive for Uber, Lyft, or an app-based delivery service.

If you get into an accident while driving, your auto insurance probably won't cover it, and they might even cancel your policy if they find out you didn't tell them you drove the car for money. It's possible that the insurance your rideshare company gives you won't cover you the whole time you're working.

When driving with a customer, companies like Uber and Lyft will cover you, but when you are between rides, they won't. You also won't be covered by a regular auto insurance policy. For rideshare, you'll need extra coverage through your insurance company. It will have holes if you don't add the extra covering.

Not all places offer rideshare protection. There is a business insurance policy you'll need if you can't get it. This will protect you fully and keep your carrier from dropping you.

Rates for Rideshare Coverage by Company

Adding a rideshare option to your car insurance costs about $94 more annually. The list below shows some car insurance companies that offer this, along with an estimate of how much they charge.

What Insurance Do Lyft and Uber Drivers Need?

As a rideshare driver, you must add a carpool endorsement to your car insurance. While you're on the Uber or Lyft app, they will cover you (see below), but you'll need to get your rideshare insurance to cover the breaks.

How Do You Buy Rideshare Insurance?

Most of the time, rideshare insurance is a mix of the coverage your carpooling company gives you and the coverage you add to your auto policy. Most of the time, ridesharing insurance can't be bought separately. For example, you can't have your car insurance through Progressive and rideshare insurance through Farmers.

When you choose rideshare insurance, make sure you:

• Tell your own car insurance company that you work for a carpool service.
• Find the gaps between what your policy and the policy of your rideshare company cover.
• Ask your insurance company if it offers rideshare insurance to fill up any gaps in your coverage or if they can price you on a commercial policy. If you can choose between the two, get quotes for each one to compare prices.

Guidelines for handling Uber or Lyft Accidents

In an accident, you should call the cops first, whether you are driving for a rideshare service or not. After that, you can think about getting insurance. In this case, you'll need to ensure you follow your company's rules, which will vary depending on the time of day. If the accident happens while you are on your way to pick up a fare or carrying a customer (periods 2 or 3), Uber and Lyft will fully cover any damages or injuries you cause up to $1 million.

Both companies offer Collision and Comprehensive coverage to protect your car from damage, but only if you add them to your insurance. If an accident happens during period 0, it's covered by your policy and needs to be recorded as such unless your state or rideshare company says otherwise. During period 1, Uber and Lyft only cover liability. To avoid coverage gaps, it is important to have rideshare insurance.

Uber and Lyft Insurance Coverage Requirements by State