UPDATED: JUNE 23, 2023 | 3 MIN READ
If you have a driving gig, rideshare insurance can provide the coverage you need in case of an accident. Learn all about rideshare insurance before you get started.
Considering becoming a driver for a rideshare or on-demand delivery service? It’s time to consider rideshare insurance.
Although rideshare companies will offer coverage with a passenger in the car (more on that later), you may pay out of pocket for those expensive car repairs or medical bills in the unfortunate event of an injury or car accident.
So, before you sign up to drive and head out to pick up your first passenger, protect yourself with everything you need to know about rideshare insurance.
What is rideshare insurance?
Rideshare insurance — sometimes referred to as ride-hailing insurance — is coverage that fills the gap between your car insurance policy and the rideshare company’s commercial policy.
This type of car insurance is beneficial for two reasons:
- Personal coverage won’t cover moments when you’re transporting paying passengers from place to place
- Rideshare employers will often cover the minimum, along with additional restrictions
Transportation Network Companies (TNCs) like Lyft and Uber driver insurance may extend additional coverage, but those are only for specific periods.
If an accident occurs while waiting to receive a ride request, your rideshare coverage will offer the best protection if you’re liable for injuries and damages. It will also potentially pay to repair or replace your damaged vehicle.
Is rideshare insurance a legal requirement for drivers?
Drivers aren’t legally required to purchase rideshare insurance. But because rideshare drivers are constantly on the road, it’s always a good idea to consider investing in added protection from accidents that could cause damage and injury to themselves or third parties.
Though rideshare insurance may not be legal, your car insurance policy may require it if you’re driving for a ride-sharing company. Before signing up and picking up passengers, check with your car insurance provider to ensure you’re meeting your policy’s outlined requirements.
Is rideshare insurance a requirement for Lyft and Uber?
Lyft drivers must only have a personal car insurance policy that meets their minimum state coverage requirements. The rideshare company recommends buying rideshare insurance for complete coverage.
Uber maintains commercial car insurance on the driver’s behalf while online on the Driver app. However, the company recommends rideshare insurance for additional protection.
You can also use their website to find insurers in your state that will match your lower personal car insurance deductible when purchasing comprehensive collision coverage.
When does Lyft and Uber’s insurance apply?
To understand when your rideshare app provides coverage, it’s important to know the three phases while the rideshare app is active:
- Available: The driver is available to pick up.
- En route: The driver has accepted a ride request and is on the way to pick up.
- On the trip: The driver has the passenger and is on the way to their destination.
Your auto insurance will be in effect when the rideshare app is off. Once your rideshare app is on, Lyft and Uber provide coverage that depends on the phases above. Understanding your coverage is the key to ensuring you and your car are properly protected. Here’s a breakdown of what each company offers below.
Uber’s rideshare driver coverage
If your auto insurance doesn’t apply, this is what Uber will cover, depending on the phase of the rideshare app while it’s active.
When the app is on, and the driver is available and waiting for a ride request, Uber’s third-party coverage covers:
- $25,000 in property damage coverage per accident
- $50,000 in bodily injury coverage per person
- $100,000 in bodily injury coverage per accident
When the app is on, and the driver has accepted a ride or is on a trip, Uber’s coverage provides:
- Uninsured/underinsured motorist bodily injury coverage
- $1 million third-party liability coverage
- Contingent comprehensive and collision coverage up to the actual cash value of the car (with a $1,000 deductible)
Lyft’s rideshare driver coverage
Like Uber, Lyft’s third-party coverage is also contingent on the three phases while the rideshare app is active. If your auto insurance doesn’t apply, this is what Lyft will cover, depending on the phase of the rideshare app.
When the app is on, and the driver is available and waiting for a ride request, Lyft’s third-party coverage covers:
- $25,000 in property damage coverage per accident
- $50,000 in bodily injury coverage per person
- $100,000 in bodily injury coverage per accident
When the app is on, and the driver has accepted a ride or on a trip, Lyft’s coverage provides:
- Uninsured/underinsured motorist bodily injury and first-party coverage
- $1 million liability coverage
- Contingent comprehensive and collision coverage up to the actual cash value of the car (with $2,500 deductible)
Rideshare insurance for delivery app drivers
Not all on-demand delivery apps are created equal. Check the policy carefully if you’re driving for a delivery app that offers car insurance. Each company is different and limited in all cases.
Some delivery companies like Instacart and Grubhub don’t provide any insurance to their drivers, so you’ll need to ensure your insurance provider is informed and provides the coverage you need. Other delivery companies like DoorDash will only offer liability insurance while you’re delivering the food.
Delivery app coverage phases
Just like the rideshare phases of coverage, any delivery app insurance will depend on the period you’re in while the app is active:
- Period 0: The app is off, and your policy is in effect.
- Period 1: The app is on, and you’re awaiting a delivery request. Your personal policy (without rideshare insurance) won’t cover you, as your vehicle is then used for commercial purposes.
- Period 2: A delivery request has been accepted, and you’re en route to pick up a delivery. Some companies may offer coverage.
- Period 3: You’ve picked up the food, and your employer’s policy (if applicable) is in effect.
How much does rideshare insurance cost?
Because it’s intended for people who use their vehicles for part-time commercial use, rideshare insurance is significantly less expensive than commercial car insurance.
Many top car insurance companies offer rideshare insurance, with monthly costs as low as $6.
Your car insurance quotes will vary depending on your profile and policy, but generally speaking, most drivers have rideshare auto insurance for as low as $30 per month.
FAQs
Does my car insurance policy already cover rideshare driving?
Most personal auto insurance policies do not include coverage while you’re driving for a rideshare company. If your policy includes existing rideshare protection, check to ensure it offers the protection you need. Many policies will cover only damage to other people and their property but not damage to you or your car. Ask your insurance company or agent to be sure.
Do I need to tell my insurance company about my driving gig, even if I’m not enrolling in rideshare insurance?
Yes. Your insurer needs to know if you’re driving for a rideshare company. If not, you run the risk of a denied claim if it’s learned the vehicle was being used for business purposes previously unbeknownst to the insurer.
How to get rideshare insurance
If you’re considering driving for rideshare or on-demand delivery app, you should notify your insurance company and strongly consider adding rideshare insurance to your coverage.
Every insurance company and transportation network company’s policies will vary, so get car insurance that ensures you and your property have the coverage you need. Compare rideshare insurance in your area here.
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