Ridesharing And Personal Auto Insurance: Understanding The Coverage Gap

If you're driving for a ridesharing company like Uber or Lyft, you'll need rideshare insurance to fill the gaps in coverage between your personal auto insurance and the commercial auto insurance provided by your rideshare employer. While your personal auto insurance policy doesn't cover you if you're driving for a ridesharing company, and the insurance provided by the ridesharing company is often limited, rideshare insurance will protect you if you're liable for injuries or damages, and pay to repair or replace your own damaged vehicle.

Personal auto insurance policies do not cover commercial driving

Commercial auto insurance is liability and physical damage protection for vehicles used for business. It is designed for businesses that use vehicles for their operations, such as contractors, landscapers, and truck drivers. Commercial vehicles require a separate policy because they are typically exposed to more risk than personal vehicles.

If you are a sole proprietor, you might only need a personal auto insurance policy. However, if you require specific commercial auto insurance coverages, high liability insurance limits, operate an unusual vehicle, haul special equipment, or transport goods or people, then you'll need commercial auto insurance.

Commercial auto insurance typically covers higher claims, different types of vehicles, and more complex legal issues. It also usually has higher liability limits than personal auto insurance. It's important to note that commercial auto insurance is generally more expensive than personal auto insurance due to these higher limits.

In summary, if you use your vehicle for commercial driving, you will need to purchase a commercial auto insurance policy to ensure you have the necessary coverage in case of an accident or incident.

Rideshare insurance fills the gap between personal and commercial insurance

Ridesharing services like Uber and Lyft have become increasingly popular in recent years. If you are considering becoming a rideshare driver, it is important to understand the insurance implications. While these companies may provide some insurance coverage for their drivers, it is often not comprehensive, and you may be left with gaps in your coverage. This is where rideshare insurance comes in.

Rideshare insurance fills the gaps in coverage between your personal auto insurance policy and the commercial insurance provided by your rideshare employer. It is designed to address the specific coverage needs of rideshare drivers, who may find themselves in a unique situation where their personal auto insurance does not apply, but they are not fully covered by their employer's commercial policy either.

When you turn on your rideshare app and start accepting passengers, your personal auto insurance policy will no longer cover you for damages. In the event of an accident during this time, the rideshare company's commercial policy should cover damages to the other driver's vehicle. However, if you are at fault, your own insurance provider may not cover the cost of damage to your vehicle, even if you have a comprehensive or collision insurance policy. This is where rideshare insurance comes in, providing coverage for this "app-on" period when your personal policy does not apply.

Rideshare insurance is typically offered as an endorsement or add-on to your existing personal auto insurance policy. It is important to note that not all insurance companies offer rideshare insurance, and those that do may not offer it in every state. When seeking out rideshare insurance, be sure to tell your personal auto insurer that you are considering driving for a rideshare company and ask about the gaps in coverage that may exist.

By purchasing rideshare insurance, you can gain extra protection and peace of mind while driving for a rideshare company. This type of insurance is designed to fill the gaps in coverage and ensure that you are protected during all stages of your rideshare journey.

You need rideshare insurance if you drive for Uber or Lyft

If you're a driver for Uber or Lyft, you need to get rideshare insurance to ensure you're covered in the event of an accident. While these companies do provide their own insurance, it's often minimal and won't cover you for all scenarios. For instance, Uber and Lyft only provide comprehensive coverage while you're en route to pick up a passenger or have passengers in the car. If you're waiting for your next ride request, you're only covered for liability, and any damage to your car won't be covered.

Rideshare insurance fills the gaps in coverage between your personal policy and the insurance provided by Uber or Lyft. It's important to note that not all insurance companies offer rideshare insurance, and those that do may not offer it in every state.

Here's how it works: when you have the Uber or Lyft app turned on and are waiting for a ride request, rideshare insurance provides limited coverage. Once you accept a ride, more complete coverage kicks in.

If you don't get rideshare insurance, your personal auto insurer is unlikely to cover accidents that happen while you're driving for Uber or Lyft. They could even cancel your policy if they find out you've been driving for a ridesharing company without the appropriate insurance.

So, if you're planning to drive for Uber or Lyft, be sure to contact your insurer and add rideshare coverage to your personal auto insurance policy. This will give you the peace of mind of knowing you're protected while you work.

You can add rideshare coverage to your personal auto insurance policy

If you're a rideshare driver, you can add rideshare coverage to your personal auto insurance policy to protect yourself and your vehicle. This is an important step as your personal auto insurance policy does not cover you when driving for a ridesharing service such as Uber or Lyft.

Rideshare coverage fills the gaps in your personal policy and any insurance the ridesharing company may offer. For example, while a ridesharing company's insurance may cover liability for bodily injury and property damage, it may not cover damage to your car. With rideshare coverage, your personal auto policy's comprehensive and collision coverage will apply, so you won't have to pay for repairs to your vehicle out of pocket.

Adding rideshare coverage to your personal auto insurance policy is a straightforward process. Contact your insurer to let them know you're driving for a rideshare company, and they will guide you through adding the coverage. It's important to be transparent with your insurer about your rideshare driving, as failing to disclose this information could result in your policy being cancelled or non-renewed.

The cost of adding rideshare coverage will depend on factors such as your vehicle, state, driving history, and the coverages and limits of your existing policy. While it will increase your premium, it is generally more affordable than a commercial auto insurance policy.

Some insurance companies that offer rideshare coverage include Progressive, Allstate, State Farm, and Farmers.

Rideshare insurance is not available everywhere

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

While some rideshare companies do not require drivers to have rideshare insurance, Uber and Lyft do. This is because your personal car insurance will not cover business use of your vehicle, which means transporting passengers or goods for money.

If you get into an accident without rideshare coverage, your insurance company may cancel your policy.

Rideshare insurance is typically offered as an add-on to an existing personal car insurance policy. It is not usually available as a stand-alone policy.

Some of the major insurance companies that offer rideshare insurance include:

• Geico
• Progressive
• USAA
• Allstate
• State Farm
• Farmers

USAA, for example, is only available to military personnel and their immediate family members and is not sold in every state.

If you cannot get rideshare insurance, you will need a commercial auto insurance policy to be fully insured and avoid being dropped by your carrier.

Frequently asked questions