Commercial Auto Insurance: Monthly Cost For Rideshare Drivers

If you're thinking of becoming a rideshare driver, you'll need to consider purchasing rideshare insurance. This is a specific type of commercial auto insurance policy designed for people who drive for rideshare or food delivery services such as Uber, Lyft, DoorDash and Postmates. While these companies may provide their own insurance for drivers, it's usually limited and your personal auto insurance is unlikely to cover accidents that occur while driving for them. This means you'll need to add rideshare coverage to your personal policy through your insurer to fill in any gaps in your auto insurance. The cost of rideshare insurance depends on the provider and the amount of coverage you buy, but it's typically under $100 per year.

Commercial insurance is required for rideshare drivers, but personal insurance may cover delivery drivers

If you're a rideshare driver, you'll need to purchase rideshare insurance to fill the gap between your personal auto insurance and the commercial auto insurance provided by your rideshare employer. This is because, when driving for personal use, a standard liability, comprehensive, or collision insurance policy is in effect. However, as soon as you turn on the rideshare app to start accepting passengers, your personal auto insurance policy will no longer cover you for damages.

Rideshare insurance is a specific type of commercial auto insurance policy designed for people who drive for rideshare or food delivery services such as Uber, Lyft, DoorDash, and Postmates. It is not typically required by law and is different from standard commercial coverage. It is also significantly less expensive than commercial auto insurance, as it is intended for people who may be using their personal vehicles for commercial use only part-time.

Many of the best car insurance companies offer rideshare insurance policies in most states, usually for under $30 per month. Companies like Geico, Progressive, USAA, and Allstate all offer rideshare insurance for as low as $6 per month.

On the other hand, if you're a delivery driver, you may not need to purchase additional rideshare insurance. This is because, unlike rideshare drivers, delivery drivers are covered by their employer's commercial auto insurance policy while driving for work. For example, DoorDash has a commercial auto insurance policy that covers drivers for up to $1 million in bodily injury and property damage if they cause an accident during the "delivery service" period. However, it's important to note that this type of coverage is considered "excess," meaning that the company's insurance only kicks in after you exhaust your own auto insurance coverage following an accident.

Therefore, it is generally recommended that delivery drivers contact their car insurance company before using their car for work to ensure they have the right coverage. While some insurance companies may allow you to add a business-use endorsement to your personal auto insurance, others may require you to purchase a separate commercial auto insurance policy. Ultimately, the best option is to speak directly to an insurance agent to discuss your specific situation and needs.

Commercial auto insurance for Uber drivers can cost $1,200 to $2,400 per year

Uber does provide its drivers with some level of commercial insurance whenever their app is on. When a driver has accepted a ride request and is carrying passengers, they are under Uber's full insurance coverage, which includes $1 million in liability coverage, uninsured/underinsured motorist coverage, and comprehensive and collision coverage (if the driver carries comprehensive and collision on their personal policy).

However, Uber's coverage is minimal while drivers are waiting for ride requests. During wait times, drivers are covered by liability insurance only, which is limited to $100,000 for bodily injury and $25,000 for property damage per accident. This is where commercial auto insurance comes in, providing additional coverage to protect the driver's car, themselves, and their savings from anything that could happen while waiting for ride requests.

Almost all major carriers offer commercial auto insurance, but some states like Michigan don't recognize it yet. If commercial auto insurance is not available, Uber drivers may have to purchase more expensive full commercial auto insurance to ensure they are adequately protected at all times.

A cheaper alternative to commercial auto insurance is rideshare insurance, which typically costs $10 to $350 per year, depending on location and insurer. Rideshare coverage is a specialized type of insurance that bridges the gap between a driver's personal auto policy and the coverage that Uber and other rideshare companies provide.

Rideshare insurance is usually offered as a hybrid of the coverage provided by the ridesharing company, plus rideshare coverage added to the driver's personal auto 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 considering rideshare insurance, drivers should:

• Inform their personal auto insurer that they are driving for a ride-hail or app-based delivery company.
• Identify the gaps between their personal policy and the ride-hail or delivery company's policy.
• Ask their insurer if they offer rideshare insurance to fill in coverage gaps or provide a quote for a commercial policy.

By taking these steps, Uber drivers can ensure they have the necessary coverage to protect themselves and their vehicles while driving for rideshare services.

Rideshare insurance is a cheaper alternative to commercial insurance, costing $10 to $350 per year

Ridesharing insurance is a cost-effective alternative to commercial insurance for rideshare drivers. While commercial auto insurance policies are designed for businesses that use their vehicles exclusively for commercial purposes, ridesharing insurance is designed for people who use their personal vehicles for commercial use only part-time.

Ridesharing insurance is a specific type of commercial auto insurance that fills the gap between your personal auto insurance and the commercial auto insurance provided by your rideshare employer. It covers the period when you are waiting to pick up a passenger or are on your way to pick them up. This period is often not covered by the insurance provided by rideshare companies.

The cost of rideshare insurance depends on the provider and the amount of coverage you buy. Companies like Geico, Progressive, USAA, and Allstate offer rideshare insurance for as low as $6 per month. However, your own car insurance quotes will vary depending on your insurance profile. For most drivers, the cost is under $30 per month.

Allstate offers rideshare coverage for only $15 to $20 per year, while Erie offers it for $9 to $15 per month. Mercury's rideshare insurance starts at $27 a month, and State Farm's rideshare insurance costs 15 to 20 percent of a driver's current premium.

Rideshare insurance is a more affordable option than commercial insurance, costing only $10 to $350 per year. It is a good idea for rideshare drivers to purchase this insurance to ensure they have adequate financial protection in the event of an accident.

Uber and Lyft provide insurance for their drivers, but the level of coverage depends on the driver's activity

Uber and Lyft do provide insurance for their drivers, but the level of coverage depends on the driver's activity. This insurance is in addition to the driver's own personal auto insurance policy, which is mandatory.

When a driver is logged into the app and waiting to accept a ride, neither company provides insurance protection for the driver. However, both companies offer third-party coverage in these situations. For example, if a driver hits another car while waiting for a ride request, the company's insurance would reimburse the other driver for any injuries or property damage, up to a certain limit.

Once a driver accepts a ride request, a higher level of coverage kicks in. Both Uber and Lyft offer third-party liability insurance, as well as collision and comprehensive coverage, that applies when a driver is en route to pick up a passenger and during the ride. This coverage includes reimbursement for repairs or replacement of the driver's vehicle, as long as the driver has a valid personal collision and comprehensive plan. There is also coverage for injuries to the driver and passengers, with a limit of $1 million per incident.

It is important to note that the insurance provided by Uber and Lyft is supplemental and contingent on the driver's personal insurance policy. The companies work with the driver's personal insurance company to provide coverage, and there may be gaps or deductibles that the driver is responsible for.

Additionally, Uber and Lyft's insurance coverage varies by state, as they work to meet the minimum state coverage requirements. Therefore, it is recommended that drivers confirm with their rideshare company and personal insurance provider to ensure they have adequate protection.

You may need to increase your insurance coverage limits to meet rideshare requirements

If you're a rideshare driver, you may need to increase your insurance coverage limits to meet rideshare requirements. Here's what you need to know:

First, it's important to understand that rideshare insurance is a specific type of commercial auto insurance designed for people who drive for ridesharing or food delivery services like Uber and Lyft. It fills the coverage gap between your personal auto insurance and the commercial insurance provided by your rideshare company. While rideshare companies provide some insurance for their drivers, it is usually limited and may not cover all the risks associated with driving for a rideshare service.

The cost of rideshare insurance depends on the provider and the amount of coverage you need. Some companies offer rideshare insurance for as low as $6 per month, but the price can vary depending on your insurance profile. It is generally less expensive than conventional commercial insurance because it is intended for people who use their vehicles for commercial purposes only part-time.

When considering rideshare insurance, you need to evaluate the gaps between your personal auto insurance policy and the coverage provided by the rideshare company. For example, Uber and Lyft provide liability coverage for their drivers, but this may not include comprehensive and collision coverage for damage to your vehicle. In that case, you would need to purchase additional coverage to fill those gaps.

Additionally, different rideshare companies may have different insurance requirements. For instance, Uber maintains commercial auto insurance on behalf of its drivers, but it is still recommended that drivers expand their personal auto insurance to include rideshare coverage for added protection. On the other hand, if you drive for a company like Turo, you will need to purchase a separate commercial policy or buy Turo's car insurance.

Finally, it's important to note that not all insurance companies offer rideshare insurance, and those that do may have state-specific restrictions. Therefore, it is essential to discuss your specific needs with your insurance provider to ensure you have the necessary coverage to meet the rideshare requirements.

Frequently asked questions