Lyft Gap Insurance: What's Covered?

Lyft's insurance coverage for its drivers has been described as having gaps that can result in higher out-of-pocket costs in the event of an accident. Lyft insurance provides liability, collision, and comprehensive coverage to its drivers, but only when the app is on and the driver is either waiting for a ride request, en route to pick up a passenger, or has a passenger in the car. When the app is off, the driver is only covered by their personal insurance policy. Lyft's liability coverage limits are also lower than what insurance experts recommend, leaving drivers potentially financially responsible for damage to their own car and their own medical bills. To address these gaps, Lyft drivers can purchase rideshare insurance, which is additional coverage available either as a standalone policy or by adding an endorsement to their personal policy.

Lyft's insurance coverage during the three periods of a trip

Lyft's insurance coverage varies during the three periods of a trip. These periods are:

Period 1: Waiting for a ride request

During this period, Lyft offers the least amount of coverage. The company maintains third-party liability insurance for covered accidents if your personal insurance does not apply. This includes:

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

Period 2: En route to pick up passengers, or during rides

In most markets, Lyft maintains at least $1,000,000 for third-party auto liability coverage for covered accidents. This includes:

• First-party coverages, which may include uninsured motorist coverage, underinsured motorist coverage, PIP, MedPay, and/or Occupational Accident coverage.
• Contingent comprehensive and collision coverage up to the actual cash value of the car ($2,500 deductible) if the driver obtains comprehensive and collision coverage on their personal auto policy.

Period 3: Ride in progress

Lyft maintains at least $1,000,000 for third-party auto liability coverage for covered accidents. This includes:

• First-party coverages, which may include uninsured motorist coverage, underinsured motorist coverage, PIP, MedPay, and/or Occupational Accident coverage.
• Contingent comprehensive and collision coverage up to the actual cash value of the car ($2,500 deductible) if the driver obtains comprehensive and collision coverage on their personal auto policy.

Lyft's liability insurance limits

During periods two and three, when a driver has been matched with a passenger and is on their way to the pick-up location or the passenger is in the car, Lyft's liability limits are higher. 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. However, the latter coverage comes with a $2,500 deductible, which can result in significant out-of-pocket expenses for drivers.

Lyft's liability insurance covers injuries or damages to other drivers or passengers. However, it is important to note that it does not cover damage to the driver's own car or their medical bills. As such, it is recommended that drivers consider additional insurance options, such as ride-sharing insurance or a commercial policy, to ensure they are fully protected financially in the event of an accident.

Lyft's full coverage

Lyft's insurance coverage for its drivers can be broken down into four periods.

Period Zero

When the Lyft app is off, the driver is covered only by their personal insurance policy or the standard insurance included if they rented a car through Express Drive.

Period One

When the app is on, but the driver has yet to receive a ride request, Lyft provides 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.
• $25,000 per accident for property damage.

Period Two

When a ride request has been accepted and the driver is travelling to the pickup location, Lyft provides full coverage auto insurance. This includes:

• At least $1,000,000 for third-party auto liability coverage.
• First-party coverages, which may include uninsured motorist coverage, underinsured motorist coverage, personal injury protection (PIP), MedPay, and/or Occupational Accident coverage.
• Contingent comprehensive and collision coverage up to the actual cash value of the car ($2,500 deductible).

Period Three

After the passenger has been picked up and the ride is in progress, Lyft maintains the same coverage as in period two.

Lyft's insurance vs. your personal insurance

Lyft's insurance coverage for its drivers changes depending on the status of their trip. When the Lyft app is off, the driver is covered only by their personal insurance policy. When the app is on, but the driver is waiting for a ride request, Lyft covers them with third-party liability insurance. When the driver is en route to pick up a passenger, Lyft maintains third-party auto liability coverage of at least $1,000,000 for covered accidents. During the ride, Lyft maintains the same liability coverage and also includes first-party coverages, such as uninsured motorist coverage, underinsured motorist coverage, and more.

Lyft's default insurance is contingent and can leave gaps in coverage, increasing the driver's financial risk. For example, Lyft's liability coverage has limits, and once the costs of an accident exceed these limits, the driver must pay out of pocket. Lyft's insurance also does not cover injury or damage to the driver or their vehicle. Therefore, it is recommended that Lyft drivers have the appropriate personal auto insurance coverage that meets the minimum state requirements. Most personal auto policies will not cover drivers while they are using the Lyft app.

To fill in the gaps left by Lyft's insurance, drivers can purchase ride-sharing insurance, which is an add-on to their existing auto insurance policies. This type of insurance provides full coverage even when Lyft's insurance does not apply and offers a lower price than commercial auto insurance. It is important for drivers to review their personal insurance policies and determine if they need additional coverage to ensure they are adequately protected while driving for Lyft.

Lyft's insurance gaps and how to fill them

Lyfts Insurance Gaps and How to Fill Them

Lyft offers insurance to its drivers, but it is important to understand the gaps in its coverage and how to fill them to ensure you are completely covered.

Lyft's Insurance Coverage

Lyft insurance provides liability, collision, and comprehensive coverage to all of its drivers. However, the default insurance offered by Lyft can leave gaps in your coverage, increasing your financial risk. Lyft's insurance coverage varies depending on the different periods of your trip:

• Period 1: The app is on, and you are waiting for a ride request. Lyft offers the least amount of coverage during this period, with only liability coverage in place.
• Period 2: You've been matched with a passenger and are on your way to the pickup location. Lyft provides higher liability limits and contingent comprehensive and collision coverage during this period.
• Period 3: The passenger is in the car, and this period ends when you drop off the passenger. Lyft maintains the same coverage as Period 2.

Lyft's liability coverage during Period 1 has limits of $50,000 per person for bodily injury, up to $100,000 per incident, and $25,000 for property damage. These limits are significantly lower than what most insurance experts recommend. It's important to note that liability insurance covers injuries or damages to other drivers or passengers, but you will be financially responsible for damage to your vehicle and your medical bills.

During Periods 2 and 3, Lyft's coverage includes $1 million in third-party liability coverage, uninsured/underinsured motorist coverage, and contingent comprehensive and collision coverage up to the cash value of your car. However, the latter coverage comes with a $2,500 deductible, which can result in high out-of-pocket expenses.

Filling the Gaps in Lyft's Insurance

To fill the gaps in Lyft's insurance coverage, you should consider purchasing rideshare insurance or a rideshare endorsement. Rideshare insurance is a form of commercial insurance that addresses the specific needs of rideshare drivers. It fills in the coverage gaps that exist between your personal auto insurance and the commercial auto insurance provided by Lyft.

Rideshare insurance is typically offered as an add-on to your existing auto insurance policy or as a standalone policy from separate insurance carriers. It ensures that you have full coverage even when Lyft's insurance does not apply. Some insurance companies that offer rideshare insurance include GEICO, State Farm, Allstate, and Farmers.

When deciding on rideshare insurance, it is recommended to carry the following types of insurance on your personal policy:

• Liability insurance: This is required in every state and covers injuries to another person or damage to their property due to an accident you caused.
• Collision and comprehensive coverage: While not required by law, this coverage is essential if you're still paying off a car loan. Collision coverage pays for vehicle repair and replacement costs, even if you're at fault. Comprehensive coverage includes theft, fire, vandalism, and collision with animals.
• Uninsured/underinsured motorist coverage: This will help cover medical bills for you and your passengers if the other driver is at fault but doesn't have insurance or is underinsured.

In addition, you may also want to consider gap coverage and medical payments coverage. Gap coverage will protect you in case your vehicle is totaled, as your insurer will only pay the car's actual cash value, not what you still owe on it. Medical payments coverage will take care of the cost of medical expenses due to a car accident and can even cover your health insurance deductible.

Frequently asked questions