Insurance Risks: Ride Sharing

If you're driving for a ridesharing company like Uber or Lyft, you may need rideshare insurance to fill the coverage gap between your personal auto insurance and the commercial auto insurance provided by your rideshare employer. While ridesharing companies do offer some coverage, it may not apply while you're waiting for a ride request or when you have a passenger in your car.

If you don't inform your insurer that you're driving for a ridesharing company, they could cancel or non-renew your policy.

Your auto insurance company may drop you if they find out you drive for money without informing them

If you drive for a ridesharing company such as Uber or Lyft, you need to inform your auto insurance company. If you don't, they may drop you as a customer. This is because driving for a ridesharing company is considered a commercial activity, and your personal auto insurance policy does not cover commercial use of your vehicle.

Ridesharing companies like Uber and Lyft do provide some insurance coverage for their drivers, but it is often inadequate and may not cover you during certain periods, such as when you are waiting for a ride request or in between rides. As a result, you may need to purchase additional rideshare insurance to fill in the gaps in coverage.

Rideshare insurance is typically offered as an add-on to your personal auto insurance policy and is relatively inexpensive, usually costing around $6 to $25 per month. However, it is important to note that not all insurance companies offer rideshare coverage, and it may not be available in all states. If you cannot get rideshare insurance, you may need to purchase a commercial auto insurance policy, which is typically more expensive.

Failing to disclose your ridesharing activities to your insurance company could lead to negative consequences. In the event of an accident, your insurance company may reject your claim if they find out you were using your vehicle for commercial purposes without the appropriate coverage. In addition, they may drop you as a customer or increase your premiums. Therefore, it is essential to be honest and upfront with your insurance company about your ridesharing activities to ensure you have the proper coverage and avoid any financial risks.

You need rideshare insurance if you drive your car to earn money

If you drive your car to earn money, you need rideshare insurance. This is because personal auto insurance policies typically exclude rideshare trips. Your insurer will have priced your policy assuming that you are driving for personal use, and not for professional reasons, where you are earning money and putting extra miles on your car. Therefore, your personal auto policy will not cover you while you are "at work".

Rideshare insurance fills the gap between your personal auto insurance and the commercial auto insurance provided by your rideshare employer. It is a good choice for a driver who wants to bridge the gap between their personal car insurance and the coverage offered by rideshare companies.

Most major insurers do not allow you to use your personal car insurance for business purposes. Your personal auto insurer is unlikely to cover accidents that happen during your ridesharing gig, and it could cancel your policy if it finds out you haven’t disclosed that you drive the car for money. Even if you have coverage from the company you rideshare for, it likely won’t apply the entire time you’re on the job.

Therefore, you will need to add rideshare coverage to your personal policy through your insurer. Without the added coverage, you’ll have gaps in your auto insurance.

Rideshare insurance is available from many of the largest auto insurers in the country, including State Farm, Farmers, Progressive, Allstate, Liberty Mutual, and USAA. It is usually offered as a form of gap or supplemental coverage, and you typically can’t buy it as a stand-alone policy.

Adding ridesharing coverage to your personal policy could cost $9 to over $25 more per month, according to some insurer websites. However, some companies say it is cheaper, with USAA stating that its rideshare add-on costs as little as $6 a month, and State Farm saying its rideshare insurance endorsement typically adds 15% to 20% to the policyholder’s premium.

You need to add rideshare coverage to your personal policy through your insurer

If you are a rideshare driver, you need to add rideshare coverage to your personal policy through your insurer. This is because your personal auto insurance will not cover you when you are driving for a ridesharing company such as Uber or Lyft. While these ridesharing companies do provide some insurance for their drivers, their coverage is limited and may not apply in certain situations, such as when you are waiting for a ride request.

Adding rideshare coverage to your personal policy will help fill any coverage gaps and ensure that you are fully protected in the event of an accident. This type of insurance is typically offered as an endorsement or add-on to your existing policy and can provide coverage for things like liability, uninsured/underinsured motorist bodily injury, and comprehensive and collision coverage.

It is important to note that not all insurers offer rideshare coverage, and it may not be available in all states. If you are unable to obtain rideshare insurance, you may need to purchase a commercial auto policy instead. This option tends to be more expensive, but it may be the only way to obtain the necessary coverage.

By adding rideshare coverage to your personal policy, you can rest assured that you have the proper protections in place while working as a rideshare driver. This will help ensure that you are not left financially vulnerable in the event of an accident or incident while on the job.

You can get rideshare insurance from major auto insurers like State Farm, Farmers and Progressive

If you're a rideshare driver, you may find that your personal auto insurance policy doesn't cover you while you're on the job. This is because, when driving for a ridesharing company, you're technically using your personal car for commercial work, which often isn't covered by standard auto insurance policies. This can create a gap in your auto coverage, leaving you vulnerable in the event of an accident.

To address this issue, some major auto insurers like State Farm, Farmers, and Progressive offer rideshare insurance. This type of insurance is designed specifically for rideshare drivers and can fill the coverage gaps that may exist while you're logged into the rideshare company's app but haven't accepted a ride yet.

State Farm's rideshare insurance, for example, extends the coverage you already have on your personal auto policy. It also provides additional protection on top of the coverage maintained by the Transportation Network Company (TNC) you drive for, such as Uber or Lyft. State Farm's rideshare coverage typically applies from the time you turn on the app to pick up a passenger until you deliver that passenger to their destination.

Farmers also offers rideshare insurance, called Farmers Rideshare, which can be added to your existing auto policy. This coverage fills the gap when you're logged into the rideshare company's app but haven't accepted a ride yet, ensuring you're protected in the event of an accident during this period.

Progressive also provides rideshare insurance, which you can add to your personal auto insurance policy. This coverage protects you while you're logged into a ridesharing platform's app and waiting to receive a ride request. Progressive's rideshare insurance also covers drivers who operate on delivery service platforms like Uber Eats or DoorDash in most states.

By purchasing rideshare insurance from these major auto insurers, rideshare drivers can gain peace of mind, knowing they have the necessary coverage to protect themselves and their vehicles while working.

You can't buy rideshare insurance as a stand-alone policy

Rideshare insurance is a specific type of commercial auto insurance policy designed for people who drive for rideshare or food delivery services such as Uber, Lyft, DoorDash, and Postmates. It fills the coverage gap between your personal auto insurance and the commercial auto insurance provided by your rideshare employer.

Rideshare insurance is not available everywhere. If you can't get it, you'll need a commercial insurance policy to be fully insured and avoid being dropped by your carrier.

Frequently asked questions