Insurance Premiums: Uber Drivers And The Cost Conundrum

If you're thinking about becoming an Uber driver, it's important to understand how it could affect your insurance. While Uber does provide insurance coverage for its drivers, there are some gaps and limitations that you should be aware of. Firstly, Uber's insurance only covers you when the app is running and you are working. The level of coverage also depends on whether you are waiting for a ride request, en route to pick up a passenger, or on a trip with a passenger in your car. During active rides, Uber provides comprehensive coverage, including liability, collision, and uninsured motorist protection. However, when you are online without a passenger, the company only offers limited liability coverage.

To fill in these gaps, many Uber drivers consider purchasing rideshare insurance, which can be added as an endorsement to their personal auto insurance policy. This ensures that they have adequate coverage for all situations, as personal insurance typically does not cover ridesharing activities due to its exclusion of driving-for-hire. It's important to note that failing to inform your insurance company about your ridesharing activities could result in them dropping your policy or denying any claims in the event of an accident.

Additionally, it's worth mentioning that becoming an Uber driver may increase your insurance premiums. This is because you'll be spending more time on the road, which statistically increases your risk of being involved in an accident.

Uber's insurance coverage for drivers

Ubers Insurance Coverage for Drivers

Uber provides insurance coverage for its drivers, but it is important to note that this insurance only applies when the driver is online and working for Uber. There are different levels of coverage depending on the driver's status and the company's insurance policy has certain limitations.

Firstly, it is important to note that Uber requires all drivers to have valid personal auto insurance that meets the mandatory minimum limits. This personal insurance covers the driver when they are offline and not working for Uber.

When a driver is online and available for a trip but has not yet accepted a ride request, Uber offers limited liability coverage. During this period, known as Period 1, Uber's insurance provides:

• $50,000 in bodily injury coverage per person, up to $100,000 per accident.
• $25,000 in property damage coverage per accident.

In some states, Uber may also provide additional coverage during Period 1, such as protection against uninsured or underinsured drivers and medical payments coverage.

Once a driver accepts a ride request and is en route to pick up a passenger, or is on a trip with a passenger in the car (Period 2 and 3), Uber's insurance coverage becomes more comprehensive. During these periods, Uber offers:

• $1 million in third-party liability coverage to protect riders against covered accidents.
• Uninsured/underinsured motorist coverage for bodily injury to the driver and passengers if the other driver is at fault and uninsured or underinsured.
• Comprehensive and collision insurance to cover the cost of repairs to the driver's car, up to the actual cash value, with a $2,500 deductible.

In most US states, Uber also offers Optional Injury Protection, which covers medical expenses, disability payments, and survivor benefits for the driver and their family in case of an accident.

It is worth noting that Uber's insurance coverage does not include regular maintenance on the driver's car, and it is the driver's responsibility to maintain their vehicle.

To summarise, while Uber does provide insurance coverage for its drivers, there are gaps in this coverage, and it is recommended that drivers consider purchasing additional rideshare insurance to ensure they are fully protected in all situations.

Personal insurance policies and their limitations

Personal insurance policies are a type of legal contract between an individual and an insurance company. They are designed to provide financial protection in the event of unexpected incidents or accidents. While the specific terms of personal insurance policies can vary, there are several common types of personal insurance that individuals may consider purchasing to protect themselves and their families. Here are the limitations of some of these policies:

Health Insurance: Health insurance is designed to protect individuals from the financial burden of medical bills and expenses in the event of an illness or accident. However, a limitation of health insurance is that it may not cover all types of medical expenses, and individuals may still be responsible for a portion of the costs. Additionally, health insurance policies often have specific networks of healthcare providers, and seeking care outside of this network may result in higher out-of-pocket costs.

Auto Insurance: Auto insurance is a type of insurance that covers individuals in the event of a vehicle accident. While it can provide financial protection for repairs, medical expenses, and liability claims, it has limitations. For example, auto insurance policies typically have coverage limits, and individuals may be responsible for expenses exceeding these limits. Additionally, auto insurance may not cover certain types of vehicle damage, such as damage due to floods or vandalism, unless comprehensive coverage is added to the policy.

Life Insurance: Life insurance provides financial support to an individual's survivors in the event of their death. However, life insurance policies have limitations, such as specific coverage amounts and conditions that must be met for the policy to pay out. For example, certain life insurance policies may only cover deaths resulting from specific causes or perils, excluding others.

Long-Term Disability Insurance: Long-term disability insurance provides financial support to individuals who become unable to work due to a disability. While this type of insurance can be crucial in maintaining income, it often has limitations on the amount and duration of coverage. Additionally, long-term disability insurance policies may have waiting periods before coverage begins and may not cover all types of disabilities.

It is important to carefully review the terms, conditions, and exclusions of any personal insurance policy to understand its limitations and ensure that it meets your specific needs.

The cost of 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.

Rideshare insurance is usually offered as a form of gap or supplemental coverage, so the process of obtaining it is different from purchasing standard personal or commercial insurance. It is often sold as a policy add-on or endorsement to an existing policy.

Companies like Geico, Progressive, USAA, and Allstate offer rideshare insurance for as low as $6 per month. The cost of rideshare insurance depends on your insurance profile, but for most drivers, it is under $30 per month. It is significantly less expensive than commercial auto insurance because it is intended for people who may be using their vehicles for commercial purposes only part-time.

If you are a rideshare driver, your personal auto policy will only cover your vehicle's personal use. You will need a commercial policy if you are driving your car for business. If you do not have rideshare insurance and get into an accident while driving for a rideshare company, your personal liability car insurance policy may not cover the cost of damages, and you could even have your coverage dropped.

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. Many rideshare companies, including Uber and Lyft, provide bodily injury liability, property damage liability, underinsured/uninsured motorist coverage, and comprehensive coverage for their drivers. However, this coverage is minimal and only enough to satisfy state requirements.

Rideshare insurance addresses the coverage gaps left by existing holes in minimal liability insurance, rideshare company insurance, and standard commercial insurance. It extends specific coverages on the personal policies of rideshare drivers so that they are covered during the "app-on" period.

How to Get Rideshare Insurance

To get rideshare insurance, contact your insurer and ask about coverage. Many providers will allow you to add rideshare coverage to your existing policy for a low monthly cost. You can also compare quotes from different insurers to find the best coverage and price for your needs.

Uber's insurance requirements for drivers

Uber provides insurance for its drivers, but it is only applicable in certain situations. To be eligible for Uber's insurance, you must be actively using the Uber app. Even then, there are gaps in Uber's coverage that you should be aware of.

Uber Driver Insurance

This insurance covers Uber drivers and their passengers when they are actively using the Uber app. It is provided at no extra cost to the driver. However, it does not cover everything. You are only covered when you are active on the app and/or driving passengers. Depending on the circumstances, it might cover the people or property you damage if you are at fault. It may also cover any damages caused to you, your passengers, or your car if you are not at fault, but the responsible party doesn't have insurance.

Commercial Insurance

Commercial insurance is required if you use your vehicle for business purposes. It is different from a rideshare endorsement, which is added to your personal policy. Commercial insurance protects you only when you are working, while your personal policy covers you when driving for non-work-related purposes. The cost of commercial insurance can be higher than personal car insurance, but you may be able to bundle it with your personal car insurance to get a better deal. Commercial insurance policies cover things like property damage, bodily injury liability coverage, medical payments, uninsured motorists, and comprehensive and collision insurance.

Uber's Insurance Coverage

When you are waiting for ride requests with the Uber app turned on, Uber's insurance may cover accidents you cause, but only for damages to third parties (people or property). The coverage limits are as follows:

• Up to $50,000 per person for bodily injury.
• Up to $100,000 per accident for bodily injury.
• Up to $25,000 in property damage per accident.

Once you have accepted a ride request and are en route to pick up the passenger, you will have the highest level of coverage as you are officially 'on the clock'. Uber's insurance coverage includes:

• Third-party liability coverage of up to $1,000,000.
• Underinsured/uninsured motorist bodily injury coverage.
• Comprehensive and collision insurance if you have personal auto coverage to protect you when not using the Uber app.

It is important to note that coverage for you and your riders only occurs if you are not responsible for the accident, and the responsible party doesn't have sufficient insurance.

Additional Considerations

Uber recommends that drivers consult their fellow drivers to understand better how the insurance works and what connections they may have to the best insurance options. It is also recommended to shop around and compare rates for different policies, including rideshare endorsements and commercial policies.

Additionally, drivers should be aware that their insurance costs can impact their earnings and route choices. Therefore, it is essential to plan and budget for insurance costs as a cost of doing business.

Finally, it is crucial to have both Uber insurance and a personal policy to drive for Uber. Relying solely on Uber insurance is not advisable due to its coverage gaps.

The insurance implications of driving for Uber Eats

If you are considering becoming an Uber Eats driver, it is important to be aware of the insurance implications. Whether you are using a car, motorbike, or scooter, you will need a Certificate of Motor Insurance to deliver food. This certificate must cover food delivery, hire, and reward (not excluding food delivery).

Uber's Insurance Coverage

Uber maintains commercial auto insurance on your behalf for ridesharing and delivery activities when you are driving on the Uber platform. This insurance meets or exceeds the required coverage. However, it is important to note that Uber's insurance coverage has certain limitations and gaps. For example, Uber's insurance only covers you when you are logged in and working, and the specific coverage depends on factors such as who was at fault, whether you were offline, online, en route, or on a trip, and your personal insurance policy.

Personal Insurance

In addition to Uber's insurance, you must maintain your own personal auto insurance policy. This is required by law, and you must provide proof of this insurance to drive and deliver with Uber. Your personal insurance policy will cover you when you are offline and when you are en route to or on a trip, provided that your policy includes comprehensive and collision coverage.

Gaps in Coverage

There may be gaps in coverage between your personal insurance and Uber's insurance. For example, Uber's insurance does not cover regular maintenance on your car, and it does not cover rental cars if you are in an accident and need alternative transportation. To fill these gaps, you may need to purchase additional insurance, such as rideshare insurance or commercial insurance.

Cost Implications

Maintaining adequate insurance coverage as an Uber Eats driver may increase your insurance costs. The cost of rideshare insurance or commercial insurance can vary depending on factors such as your location and the insurance provider. However, in general, most people can obtain this additional coverage for less than $30 per month.

Accident Procedures

In the event of an accident, it is important to follow certain procedures. First, ensure that everyone involved is okay and contact the necessary emergency services. Take photos of the accident, including damage to the vehicles and the accident location, and obtain the contact and insurance information of the other drivers and riders involved. You can then report the accident through the Uber Driver app or by contacting Uber's support staff.

In conclusion, driving for Uber Eats has insurance implications that you should carefully consider before signing up. While Uber provides some insurance coverage, it is important to maintain your own personal insurance policy and be aware of any gaps in coverage. Additionally, there may be cost implications associated with maintaining adequate insurance coverage as an Uber Eats driver.

Frequently asked questions