Alyssa Lane
If you're a rideshare driver, it's important to understand how your auto insurance could be affected. Using your car for ridesharing may require additional coverage in the form of rideshare insurance to ensure you're financially protected while driving. While ridesharing companies like Uber and Lyft may provide some insurance, their coverage may be limited while you're waiting to match with a rider or when you have a passenger in your vehicle. To fill these coverage gaps, you may need to purchase rideshare insurance, which is offered by select insurance companies. This type of insurance endorsement bridges the gap between your personal auto insurance and the commercial policy provided by the rideshare company.
| Characteristics | Values |
|---|---|
| What is rideshare insurance? | A type of auto insurance endorsement that bridges the gap between a personal auto insurance policy and the commercial policy provided by the rideshare company. |
| Who needs rideshare insurance? | Rideshare drivers who drive for ridesharing services such as Uber and Lyft. |
| What does rideshare insurance cover? | Additional coverages such as roadside assistance, rental car reimbursement, and other coverages that may be included in your policy. |
| How much does rideshare insurance cost? | The cost of rideshare insurance varies by state and company, and it is difficult to determine an average price. Adding a rideshare endorsement to your car insurance policy will raise your rates. |
| What happens if I don't have rideshare insurance? | Driving for a ridesharing company without your own rideshare coverage could leave you uninsured during certain parts of your shift, such as when you are waiting to accept passengers. |
| What are the alternatives to rideshare insurance? | Some states and rideshare services may require you to purchase a commercial policy instead. |
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What You'll Learn
Additional coverage
Ridesharing companies like Uber and Lyft provide drivers with coverage, but it is often limited and may not cover all stages of ridesharing. For example, you may not be covered when waiting to accept a ride or when you have a passenger in your vehicle. This is where additional coverage can help fill in the gaps and ensure you're protected at all times.
Some insurance companies offer rideshare insurance as an optional add-on or standalone policy that extends your personal policy coverage when driving for a rideshare company. This additional coverage typically includes:
- Roadside assistance
- Rental car reimbursement
- Deductible reimbursement
- Coverage for bodily injury and property damage
- Coverage for repairs to your car
For example, State Farm's rideshare coverage extends the limits and deductibles from your personal auto policy to cover you while driving for a Transportation Network Company (TNC). Mercury Insurance's rideshare coverage fills in liability gaps and provides excess coverage when TNC coverage isn't in effect.
It's important to note that the cost of additional coverage may vary depending on your existing coverages, discounts, and other rating factors. Be sure to contact your insurance provider to understand your specific options and costs.
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Personal insurance policies
If you are a driver for a ride-sharing company, your personal insurance policy may not cover you. Most personal auto policies do not include coverage when you are using your car for ride-sharing. Engaging in ride-sharing activities opens you up to potential liabilities that your personal auto policy may not cover, so an insurer could cancel or non-renew your policy if they find out you're driving for a ride-share service and didn't notify them.
Some insurance companies now offer policies for ride-sharing drivers. These policies may cover only part of the time you are driving, such as the time before you pick up a passenger. Some policies cover only damage to other people and their property, but not damage to you, your family members, or your car. Ask your insurance company or agent to be sure you have the coverage you need.
You may need to add rideshare coverage to your personal policy through your insurer. Without the added coverage, you’ll have gaps in your auto insurance. Rideshare insurance is extra coverage for people who drive for app-based ride-hailing or delivery services, like Uber, Lyft, or DoorDash. While these companies may provide their own insurance for drivers, insurers typically require app-based delivery and ride-hail workers to get rideshare insurance to fill gaps in their coverage.
Rideshare coverage may help protect you from the time you turn your app on until you deliver your passenger. It is a simple way to extend the limits and deductibles from your personal auto policy to cover you while you are driving for a Transportation Network Company (TNC).
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Commercial insurance
Transportation Network Companies (TNCs) such as Uber, Lyft, and Sidecar are commercial enterprises. TNC drivers use their personal vehicles for commercial activities to transport passengers from one place to a set destination. However, TNC drivers do not have a livery driver's license, and their cars are neither registered nor insured as commercial vehicles.
Personal auto insurance policies are not designed to cover commercial use of a vehicle. Therefore, TNC drivers need commercial insurance coverage. Commercial auto insurance policies generally carry higher liability limits and are underwritten with the recognition that commercial vehicles travel more miles than private-passenger cars.
Some insurance companies don't offer rideshare coverage or only offer it in certain states. If yours doesn't, you can switch to a company that does or consider a commercial auto policy. In some states and rideshare services, you may be required to purchase a commercial policy. Commercial insurance is typically more expensive, but in some instances, it's the only way to obtain rideshare coverage.
When your rideshare app is off, you use your car like any other driver, and your personal auto insurance applies. After you've accepted a ride request, the TNC's commercial insurance policy takes over as the primary coverage. However, the commercial TNC policy only provides limited insurance coverage when your rideshare app is on, but you haven't accepted a fare.
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Accidents and liability
If you're involved in a ridesharing accident, it's important to understand how liability works before filing a claim for damages. The issue of liability in ridesharing accidents can be complicated, as there may be multiple potentially responsible parties. These could include the driver, the owner of the vehicle, or the company that maintains the vehicle.
In terms of insurance coverage, it's important to note that most standard insurance policies for personal vehicle use do not cover accidents that occur when the car is being used for commercial purposes, such as ridesharing. However, some insurance companies now offer policies specifically for ridesharing drivers, which may cover only part of the time spent driving, such as the time before picking up a passenger. These policies may only cover damage to other people and their property, but not to the driver, their family members, or their car. Therefore, it is important to check with your insurance company and understand the specifics of your policy before engaging in ridesharing.
If you are a ridesharing driver, it is important to understand the insurance coverage provided by the ridesharing company. For example, Uber maintains commercial insurance on behalf of its drivers, and the coverage depends on factors such as who was at fault, the driver's app status at the time of the accident (online, en route, or on-trip), and the driver's personal insurance policy. Uber's insurance covers at least $1,000,000 for property damage and injuries to riders and third parties involved in an accident where the driver is at fault. Additionally, Uber offers personal injury protection, including medical expenses and lost wages for drivers and riders, regardless of who is at fault. Similarly, Lyft and other ridesharing companies are required to have insurance that covers people or property their drivers injure if the driver does not have insurance, and some companies also cover damage to the driver's car.
If you are a passenger in a ridesharing vehicle involved in an accident, you may be able to seek compensation from the ridesharing driver or utilize the insurance coverage offered by the ridesharing company. However, it is important to note that you may not be able to file a lawsuit against the ridesharing company itself, as their drivers are typically not direct employees. Instead, you may need to pursue a claim against the driver or the company's insurance policy.
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Cost of rideshare insurance
The cost of rideshare insurance varies depending on several factors, including age, driving history, vehicle type, ZIP code, and coverage limits. The average cost of a rideshare policy is $87 per month for liability coverage and $99 for full coverage. The average premium for rideshare insurance is $270 per month, which is slightly higher than the average premium for non-rideshare drivers.
Rideshare insurance is a type of add-on policy that must be added to an existing personal auto insurance policy. It is not sold as a stand-alone policy. The cheapest way to obtain rideshare coverage is by adding a rideshare endorsement to your personal auto insurance policy. This fills the coverage gap during phases of the trip where your personal car insurance and the rideshare company's insurance don't apply or provide limited coverage.
Some insurance companies do not offer rideshare coverage, while others only offer it in certain states. If your insurance company does not offer rideshare coverage, you may need to switch to a company that does or consider a commercial auto policy. Commercial insurance is typically more expensive but may be the only way to obtain rideshare coverage in some states.
It is important to note that some rideshare companies, such as Uber and Lyft, provide some insurance coverage for their drivers. However, this coverage may be limited to certain periods, such as when a passenger is in the vehicle or when the app is turned on. To ensure adequate protection, it is recommended to contact your insurance company and the rideshare company to understand the extent of your coverage.
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Frequently asked questions
Rideshare insurance is an endorsement option that bridges the gap between a personal auto insurance policy and the commercial policy provided by the rideshare company. It covers you up until you accept a ride request; once you've accepted a ride, the rideshare company's coverage takes over.
Yes, ridesharing companies like Uber and Lyft provide insurance that covers liability for bodily injury and property damage. However, their coverage may be limited while you're waiting to match with a rider or when you have a passenger in your vehicle.
You can add rideshare coverage to your personal auto policy to fill any coverage gaps. Some insurance companies offer this, but it may only be available in certain states. If your insurer doesn't offer it, you may need to switch to a company that does or consider a commercial auto policy.
If you don't have rideshare insurance, you may be uninsured during certain parts of your shift, such as when you're waiting to accept passengers. In addition, your personal auto policy may not cover all potential liabilities associated with ridesharing, and your insurer could cancel or non-renew your policy if they find out you're driving for a rideshare service without the appropriate coverage.
