Rideshare Insurance: Unraveling The Extra Costs For Drivers

If you're a rideshare driver, you might be wondering if auto insurance companies will charge you more for coverage. The answer is that it depends on the company and the policy you choose. Some insurers offer specific rideshare insurance policies, while others may require you to purchase a commercial auto policy.

Rideshare insurance is designed to fill the gaps in coverage between your personal auto insurance and the insurance provided by the rideshare company. It is typically offered as an add-on to your existing personal auto policy and may be required by your insurer if they find out you're driving for a rideshare service.

The cost of rideshare insurance varies, but it generally costs more than a standard car insurance policy. However, it is usually cheaper than a full commercial auto insurance policy. Some companies offer rideshare insurance for as low as $6 per month, while others charge a percentage of your existing premium.

It's important to note that not all insurance companies offer rideshare insurance, and those that do may have different coverage options and requirements. It's always best to speak with your insurance agent to understand the specific coverage and requirements for your policy.

What is rideshare insurance?

Rideshare insurance is a type of commercial auto insurance designed for people who drive for rideshare or food delivery services such as Uber, Lyft, DoorDash, and Postmates. It fills the gap in coverage between your personal auto insurance and the commercial auto insurance provided by your rideshare employer. This type of insurance is important because, while ridesharing companies may provide some insurance for their drivers, their coverage may be limited while you're waiting to be matched with a rider or when you have a passenger in your vehicle.

Rideshare insurance is not typically included with standard auto insurance coverage, and it is not legally required in most states. However, it could save drivers a significant amount of money if they get into an accident while acting as a rideshare driver. If you have an existing car insurance policy, you can often get an endorsement for rideshare insurance that extends your personal insurance coverage to also cover you while you are driving for a ridesharing app.

Rideshare insurance functions as a form of commercial insurance, filling in coverage gaps specific to the needs of those who work in the rideshare industry. It covers the "app-on" period spent working in the rideshare industry, when minimum liability coverage does not apply. It also covers the period when you are waiting for a ride request, which is when neither your personal insurance nor your employer-provided insurance typically applies.

Rideshare insurance is significantly less expensive than commercial auto insurance because it is intended for people who may be using their personal vehicles for commercial use only part-time. Companies like Geico, Progressive, USAA, and Allstate all offer rideshare insurance for as low as $6 per month, with the cost depending on factors such as driving history, location, and existing coverages and limits.

Do you need rideshare insurance?

If you drive your car to earn money, you need rideshare insurance or a commercial auto insurance policy. This is true whether you work for a ride-hailing company like Uber or Lyft or an app-based delivery service like DoorDash.

Rideshare insurance fills in the gaps in coverage between your personal auto insurance policy and the insurance provided by the ride-hailing or delivery company. It is important to note that not all insurance companies offer rideshare insurance, and those that do may not offer it in every state.

Most major insurers do not allow you to use your personal car insurance or umbrella policy for business purposes. Your personal auto insurer likely won't 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 your car for money.

Rideshare insurance for ride-hailing services like Uber or Lyft provides minimal coverage while you have the app on and are waiting for a request. More complete coverage kicks in once you've accepted a ride and are carrying passengers.

If you have full coverage and damage your car while ridesharing, you'll need to pay the ridesharing company's deductible before their insurance pays out. Both Uber and Lyft have a $2,500 deductible.

If you're driving for an on-demand delivery service that offers car insurance, check its policy carefully. Coverage differs from company to company and is limited in all cases. For example, Grubhub and Instacart don't provide car insurance, so you'll need your own rideshare or commercial policy to drive for them. Meanwhile, DoorDash generally offers liability insurance only between the time you accept a delivery request and complete the delivery or the order is canceled.

When seeking out rideshare insurance, be sure to tell your personal auto insurer that you're considering driving for a ride-hail or delivery company. Figure out the gaps between your personal policy and the company's policy, and ask your insurer whether it offers rideshare insurance to fill in those gaps. If your current insurer doesn't offer rideshare insurance, you may need to switch to a different provider.

How does rideshare insurance work?

Rideshare insurance is a type of commercial insurance that fills the gaps in coverage that are specific to rideshare drivers' needs. It is not usually included with standard auto insurance coverage, and drivers may need to purchase a separate policy or add it to their existing personal auto insurance policy.

Rideshare insurance functions as a form of commercial insurance, addressing the specific needs of those who work in the rideshare industry. It covers the periods when a driver is waiting for a ride request, en route to pick up a customer, and during the ride. During these periods, a driver's personal auto insurance policy typically does not apply, and the rideshare company's insurance coverage may be limited.

Rideshare insurance provides coverage for comprehensive and collision incidents, with the same deductible as the driver's personal policy. It also includes uninsured/underinsured motorist coverage, roadside assistance, rental car reimbursement, and other additional coverages, depending on the driver's policy.

When a driver accepts a ride request, the ridesharing company's insurance policy usually takes effect, providing coverage for liability, bodily injury, and property damage. The company's policy may also provide contingent coverage for physical damage to the vehicle and uninsured/underinsured motorist bodily injury coverage.

Some insurance companies offer rideshare insurance as a standalone policy, while others offer it as an add-on to an existing personal auto policy. The cost of rideshare insurance varies depending on factors such as location, driving history, and the selected coverages and limits.

How much does rideshare insurance cost?

The cost of rideshare insurance depends on the provider and the level of coverage. Companies like Geico, Progressive, USAA, and Allstate offer rideshare insurance for as little as $6 per month. However, the cost can vary based on factors such as your vehicle, state, driving history, and your policy's existing coverages and limits.

Rideshare insurance is typically more expensive than personal car insurance but cheaper than commercial auto insurance. It can cost anywhere from $10 more per month to nearly double the price of a traditional car insurance policy.

Some insurance providers, like Allstate, offer rideshare coverage for a fixed price. Allstate's rideshare insurance, for example, costs $20 per year. Other providers, like Erie, offer monthly rates ranging from $9 to $15. Mercury's rideshare insurance starts at $27 per month, while State Farm's rideshare insurance can add 15% to 20% to your current premium.

It's worth noting that rideshare insurance is usually offered as an add-on to an existing personal auto policy or as a hybrid policy that combines personal and rideshare coverage. This means you may not be able to purchase rideshare insurance as a stand-alone policy.

Which insurers provide rideshare insurance?

Several insurers provide rideshare insurance, which is a type of auto insurance for drivers who work for ridesharing services like Uber and Lyft. Here is a list of some of the companies that offer rideshare insurance:

• Progressive: Progressive offers rideshare insurance in most states as an add-on to a personal auto policy. They also offer for-hire livery insurance in 43 states for those who drive a taxi, limousine, or any other vehicle used to transport people for a fee.
• USAA: USAA offers rideshare insurance with low rates and flexible coverage. However, their rideshare insurance is only available to military personnel and their immediate family members and is offered in 42 states, including Washington, D.C.
• Mercury: Mercury's rideshare insurance covers drivers for Uber, including Uber Pool, and most other Transportation Network Companies (TNCs). Their policies start at $0.90 per day, and they are available in 12 states.
• Allstate: Allstate offers rideshare insurance, known as "Ride-for-Hire," which includes deductible gap coverage. Their policies are available in most states.
• State Farm: State Farm provides rideshare insurance for drivers who work for rideshare and delivery companies. Their rideshare coverage is an endorsement that can be added to an existing policy, typically increasing premiums by 15-20%.
• Farmers: Farmers offers rideshare insurance with above-average ratings for overall claim satisfaction. Their rideshare endorsement is available in 36 states.
• Geico: Geico offers rideshare insurance that replaces a customer's existing Geico policy. This option is required for Geico customers who drive for any rideshare service.
• Esurance: Esurance offers rideshare insurance in California, Illinois, and New Jersey.
• Travelers: Travelers offers rideshare insurance in Colorado and Illinois, but they do not provide deductible gap coverage.

Frequently asked questions