Lyft Insurance: Auto Repair Coverage For Drivers

Lyft insurance provides liability, collision, and comprehensive coverage to its drivers, but the default insurance offered by Lyft is contingent and can leave gaps in your coverage, which may leave you vulnerable to higher out-of-pocket costs in the event of an accident. Lyft's insurance coverage varies depending on where you are in the rideshare process, and there are three distinct periods that determine your insurance coverage while driving for Lyft. When the app is off, your personal auto insurance coverage applies. When the app is on, and you are waiting for a ride request, Lyft provides third-party liability insurance for covered accidents if your personal insurance does not apply. When the app is on and you are en route to pick up passengers or during the ride, Lyft maintains insurance for covered accidents, including third-party auto liability coverage and first-party coverages. It's important to understand the insurance coverage provided by Lyft and your personal insurance to ensure you are adequately protected in the event of an accident while driving for Lyft.

Lyft's liability coverage limits

Lyft's insurance coverage for its drivers varies depending on the three distinct periods of a ride. When the app is off, your personal auto insurance coverage applies. When the app is on, and the driver is waiting for a ride request, Lyft maintains third-party liability insurance for covered accidents if your personal insurance does not apply. This coverage includes:

• $50,000 per person for bodily injury
• $100,000 per accident for bodily injury
• $25,000 per accident for property damage

There are exceptions to these limits in Arizona, Nebraska, and Maryland, where the coverage is consistent with state requirements. In the five boroughs of New York City, Lyft does not provide any primary liability policy, and TLC drivers must procure their own policy.

When the app is on, and the driver is en route to pick up passengers or during the ride, Lyft maintains the following insurance for covered accidents:

• In most markets, at least $1,000,000 for third-party auto liability coverage (these limits are lower or not procured in some markets)
• First-party coverages, which may include uninsured motorist coverage, underinsured motorist coverage, personal injury protection (PIP), medical payments (MedPay), and/or Occupational Accident coverage
• If a driver has comprehensive and collision coverage on their personal auto policy, Lyft maintains contingent comprehensive and collision coverage up to the actual cash value of the car ($2,500 deductible)

Lyft's full coverage

Lyft offers insurance coverage to its drivers, but it is not a full coverage policy and can leave gaps that increase the financial risk for drivers. Lyft's insurance is contingent on the driver's personal auto insurance policy and the period of the ride-sharing process.

Lyft's insurance coverage changes depending on three distinct periods of a trip. When the Lyft app is off, a driver's personal auto insurance coverage applies. Once the app is turned on, Lyft provides liability coverage, which is the lowest coverage amount for the entire trip. During Period 1, when a driver is waiting for a ride request, Lyft's liability coverage limits are $50,000 per person for bodily injury, $100,000 per incident, and $25,000 for property damage coverage. Lyft offers the least coverage during this period, and drivers who already have this level of coverage through their personal policy are covered under Lyft's contingent comprehensive and collision coverage during Periods 2 and 3.

During Period 2, when a driver is matched with a passenger and is on the way to the pick-up location, Lyft's coverage includes $1 million of third-party liability coverage, uninsured/underinsured motorist bodily injury, and contingent comprehensive and collision coverage that covers up to the cash value of the car. During Period 3, when the passenger is in the car, Lyft maintains the same coverage as in Period 2.

Lyft's insurance is designed to act as primary coverage from the time a driver accepts a ride request until the ride has ended. However, Lyft's coverage is contingent, meaning that a driver must first make a claim against their own personal auto insurance policy before Lyft's coverage kicks in. Most personal auto policies will not cover drivers while they are using the Lyft app, so drivers are required to maintain personal auto insurance that meets the minimum state requirements.

To ensure full coverage, Lyft drivers should consider purchasing a separate "rideshare endorsement" policy or adding an endorsement to their existing personal policy. This additional coverage can fill any gaps in Lyft's insurance policy and provide protection during all three periods of the trip. Some insurance companies, such as Geico, State Farm, USAA, and Farmers, offer coverage specifically designed for rideshare drivers, which can help mitigate the financial risk associated with driving for Lyft.

Lyft's insurance during Period 1

It is important to note that comprehensive and collision coverage are not offered during Period 1. This means that drivers will be financially responsible for any damage to their own vehicle and their own medical bills in the event of an accident. Lyft's insurance during this period only provides coverage for injuries or damages to other drivers or passengers.

Additionally, there are exceptions to the coverage limits in certain states. For example, in Arizona and Nebraska, the third-party liability insurance limits are lower, with $25,000 per person for bodily injury, $50,000 per accident for bodily injury, and $20,000 per accident for property damage. In Maryland, Lyft maintains $125,000 for third-party liability insurance (combined single limits for bodily injury and property damage) when the driver is en route to pick up a passenger.

Furthermore, Lyft's insurance during Period 1 is considered the riskiest for drivers due to the lower-limit liability coverage. It is recommended that drivers have additional coverage, such as a rideshare endorsement or separate rideshare insurance, to ensure they are fully protected during this period. Some insurance companies, such as USAA and Farmers, offer coverage specifically for Period 1.

Lyft's insurance during Periods 2 and 3

Lyft's insurance coverage varies depending on the period of the rideshare process. Period 2 and 3 refer to the time when a driver has been matched with a passenger and is on their way to the pick-up location, and the time when the passenger is in the car until they are dropped off, respectively. During these periods, Lyft's insurance coverage includes:

• $1 million of third-party liability coverage in most markets.
• Uninsured/underinsured motorist bodily injury coverage.
• Contingent comprehensive and collision coverage up to the actual cash value of the car. However, this comes with a $2,500 deductible, resulting in significant out-of-pocket expenses for the driver before Lyft's insurance covers any accident or injury-related expenses.
• First-party coverages, which may include uninsured motorist coverage, underinsured motorist coverage, personal injury protection (PIP), medical payments (MedPay), and/or Occupational Accident coverage.

It is important to note that Lyft's insurance coverage during Periods 2 and 3 is contingent upon the driver already having comprehensive and collision coverage on their personal auto policy. Additionally, Lyft's insurance policies may have coverage gaps, resulting in higher out-of-pocket costs for drivers in the event of an accident. Therefore, it is recommended that Lyft drivers have the appropriate rideshare insurance or a rideshare endorsement to their personal policy to ensure they are fully protected.

Lyft's insurance and personal auto insurance

Lyft's insurance coverage for its drivers is contingent and changes depending on the period of the ride-sharing process. When the Lyft app is off, the driver's personal auto insurance coverage applies. When the app is on, and the driver is waiting for a ride request, Lyft maintains third-party liability insurance for covered accidents if the driver's personal insurance does not apply. This includes $50,000 per person for bodily injury, $100,000 per accident for bodily injury, and $25,000 per accident for property damage.

When the app is on, and the driver is en route to pick up passengers, Lyft maintains at least $1,000,000 for third-party auto liability coverage in most markets. If a driver obtains comprehensive and collision coverage on their personal auto policy, Lyft provides contingent comprehensive and collision coverage up to the actual cash value of the car, with a $2,500 deductible.

When the app is on, and a ride is in progress, Lyft maintains at least $1,000,000 for third-party auto liability coverage. Again, if a driver has comprehensive and collision coverage on their personal policy, Lyft provides contingent coverage with a $2,500 deductible.

Lyft's insurance coverage is designed to act as primary coverage from the time a driver accepts a ride request until the ride ends. However, it is important to note that Lyft's coverage may not be sufficient, and drivers may be responsible for repairs and medical expenses resulting from a traffic accident. Therefore, it is recommended that Lyft drivers have a rideshare endorsement or separate rideshare coverage to ensure complete protection.

Personal auto insurance policies typically do not cover commercial activities, including ride-sharing services like Lyft. Most personal policies specifically exclude this type of activity, so drivers will not be covered if they get into an accident while using their vehicle for Lyft. As such, it is crucial for Lyft drivers to disclose their ride-sharing activities to their insurance providers and ensure they have the necessary coverage to protect themselves financially.

Frequently asked questions