Lyft Driver Insurance: What You Need To Know

If you're thinking about becoming a Lyft driver, it's important to understand the insurance requirements. Lyft has specific insurance requirements that you need to meet in order to drive for the company. Firstly, you need to have a personal auto insurance policy that satisfies your state's minimum coverage requirements. This policy should include your name on it. Additionally, Lyft offers insurance for its drivers while they are on the clock, but the coverage varies depending on factors such as the type of incident and whether the driver is waiting for a passenger or already has one in the vehicle. It's important to note that Lyft's default insurance may not cover all gaps in your coverage, so you may want to consider purchasing additional insurance, such as rideshare insurance or commercial insurance.

Lyft insurance requirements for drivers

Lyft has specific insurance requirements for its drivers, which are important to understand before signing up to drive. Lyft offers insurance for its drivers while they are on the clock, but this is not a replacement for a driver's personal auto insurance policy.

Firstly, to drive with Lyft, you need a personal auto insurance policy that satisfies your state's minimum coverage requirements. Lyft requires drivers to maintain auto insurance that meets these minimum state coverage requirements. However, it's important to note that most personal auto policies will not cover you while using the Lyft app. Therefore, it is recommended to consider buying a rideshare insurance policy or a rideshare endorsement for complete coverage whenever you drive.

Lyft's insurance coverage for its drivers varies depending on certain periods of the trip. When the Lyft app is off, the driver's personal insurance policy is the only coverage. Once the app is turned on, Lyft provides liability coverage, but this is the lowest coverage amount during the trip. When a ride request is accepted, and the driver is en route to pick up the passenger, Lyft provides full coverage auto insurance. This full coverage continues during the ride when the passenger is in the vehicle.

Lyft's liability coverage has specific limits, and once the costs of an accident exceed these limits, the driver must pay out of pocket. Lyft's liability insurance limits are $50,000 per person and $100,000 per accident for bodily injury, and $25,000 per accident for property damage. It's important to note that liability insurance will only cover the other party's repair or medical costs when the driver is at fault and will not cover injury or damage to the driver or their vehicle.

Lyft's full coverage includes a $1 million third-party liability policy, uninsured motorist, underinsured motorist, collision, and comprehensive coverage up to the actual cash value of the car. There is a $2500 deductible for comprehensive and collision policies, which means drivers may need to pay large amounts out of pocket before Lyft covers costs.

Lyft insurance coverage periods

Lyft insurance coverage varies depending on the driver's status. There are three distinct periods that determine the insurance coverage while driving:

Period 1: Coverage when the app is off

If a driver is offline, their personal auto insurance coverage applies. If the driver rented a car through Express Drive, the standard insurance included applies. It's important to note that most personal auto policies will not cover the driver while they are driving with Lyft.

Period 2: Coverage when the app is on and drivers are able to receive ride requests

Lyft provides third-party liability insurance for covered accidents if the driver's personal insurance does not apply. The coverage limits are as follows:

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

Period 3: Coverage when the app is on and drivers are en route to pick up passengers, or during rides

Lyft provides the following insurance coverage for covered accidents:

• In most markets, at least $1,000,000 for third-party auto liability coverage (these limits may be lower or not procured in some markets)
• First-party coverages, which may include uninsured motorist coverage, underinsured motorist coverage, personal injury protection (PIP), medical payments (MedPay), and/or Occupational Accident coverage
• If a driver has comprehensive and collision coverage on their personal auto policy, Lyft provides contingent comprehensive and collision coverage up to the actual cash value of the car ($2,500 deductible)

It's important to note that Lyft's insurance coverage may vary in certain states and that livery or Transportation Charter Permit (TCP) drivers are subject to different insurance requirements.

Lyft insurance vs. personal insurance

Overview

Lyft insurance provides liability, collision, and comprehensive coverage to its drivers, but it is not a replacement for personal insurance. Lyft's default insurance is contingent, which means it can leave gaps in your coverage, increasing your financial risk. Therefore, it is important to understand how the two types of insurance work together to ensure you are fully protected while driving for Lyft.

Lyft Insurance

When you drive for Lyft, each trip is divided into three coverage periods:

• Period 1: The app is on, and you are waiting for a ride request.
• Period 2: You have been matched with a passenger and are on your way to the pick-up location.
• Period 3: The passenger is in the car, and this period ends when you drop off the passenger.

Lyft's insurance coverage varies during these periods. During Period 1, Lyft offers the least coverage, with only liability insurance in effect. This includes:

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

During Periods 2 and 3, Lyft provides higher liability limits and contingent comprehensive and collision coverage if you already have this coverage on your personal policy. This includes:

• $1 million of third-party liability coverage.
• Uninsured/underinsured motorist bodily injury coverage.
• Contingent comprehensive and collision coverage up to the cash value of your car, with a $2,500 deductible.

Personal Insurance

Your personal auto insurance policy only covers your vehicle's personal use and not commercial activities that earn you money, such as ridesharing. Therefore, your personal policy will only be in effect when the Lyft app is turned off. Most personal auto policies will not cover you while using the Lyft app, and you may need to purchase a special rideshare policy or add an endorsement to your existing policy to ensure coverage while driving for Lyft.

Recommendations

To ensure full coverage while driving for Lyft, it is recommended to have the following types of insurance on your personal policy:

• Liability coverage: This is required in every state and covers injuries to another person or damage to their property in an accident that you caused.
• Collision/comprehensive coverage: While not required by law, this coverage is necessary if you are still paying off a car loan. Collision covers vehicle repair and replacement costs, even if you are at fault, while comprehensive covers events like theft, fire, and vandalism.
• Uninsured/underinsured motorist coverage: This will help cover medical bills for you and your passengers if the at-fault driver in an accident doesn't have insurance or is underinsured.

In addition, consider adding these optional coverages to your personal policy:

• Gap coverage: This covers the difference between your car's actual cash value and what you still owe on it if your vehicle is totaled.
• Medical payments coverage: This covers the cost of medical expenses due to a car accident and can also cover your health insurance deductible.

In conclusion, Lyft insurance and personal insurance work together to provide coverage for Lyft drivers. Lyft's insurance covers you during different periods of a trip, while your personal policy fills in the gaps to ensure full protection. It is important to understand the limitations of both types of insurance and take the necessary steps to ensure you have the right coverage while driving for Lyft.

Lyft insurance and financial risk

Lyft insurance provides liability, collision, and comprehensive coverage to its drivers. However, the default insurance offered by Lyft is contingent and may leave gaps in your coverage, significantly increasing your financial risk.

Lyft's Default Insurance Coverage

Lyft's insurance coverage for its drivers changes depending on the period of the ride-sharing trip. There are three distinct periods that determine a driver's insurance coverage:

• Period 1: App is on, waiting for a ride request. Lyft provides third-party liability insurance for covered accidents if your personal insurance does not apply. This includes:
• $50,000/person for bodily injury
• $100,000/accident for bodily injury
• $25,000/accident for property damage
• Period 2: App is on, en route to pick up passengers. Lyft maintains the following insurance for covered accidents:
• In most markets, at least $1,000,000 for third-party auto liability coverage (these limits are lower or not procured in some markets)
• First-party coverages, which may include uninsured motorist coverage, underinsured motorist coverage, PIP, MedPay, and/or Occupational Accident coverage
• If a driver has comprehensive and collision coverage on their personal auto policy, Lyft maintains contingent comprehensive and collision coverage up to the actual cash value of the car ($2,500 deductible)
• Period 3: App is on, and a ride is in progress. Lyft maintains the same insurance coverage as Period 2 for covered accidents.

Financial Risk

Lyft's default insurance coverage can leave gaps, exposing drivers to financial risk. Here's how:

• Limited Coverage When Waiting for Ride Requests: During Period 1, when the app is on and the driver is waiting for a ride request, Lyft's liability coverage may not be sufficient to cover all potential costs in the event of an accident.
• Gaps in Coverage: Lyft's insurance only covers certain periods of the trip, leaving gaps when the app is off or when the driver is not actively providing ride-sharing services. During these gaps, the driver's personal insurance policy would need to cover any accidents or incidents.
• High Deductibles: Lyft's contingent comprehensive and collision coverage has a $2,500 deductible, which means drivers may need to pay large amounts out of pocket before Lyft covers costs.
• Exclusions and Exceptions: Lyft's insurance coverage has various exceptions and exclusions, such as specific states or circumstances where the coverage limits are lower or not procured. For example, for rides originating in the five boroughs of New York City, Lyft does not procure any liability policy, and drivers must procure their own insurance.

Mitigating Financial Risk

To mitigate financial risk, Lyft drivers can consider the following options:

• Purchase Rideshare Insurance: This type of insurance is designed specifically for ride-sharing drivers and can provide full coverage even when Lyft's insurance doesn't apply. It is typically offered as an add-on to existing auto insurance policies or as a stand-alone policy.
• Review Lyft's Insurance Partners: Lyft has trusted auto insurance partners that offer various degrees of protection. Comparing their policies and rates can help drivers find the best coverage for their needs.
• Understand Personal Policy Limitations: Most personal auto insurance policies do not cover ride-sharing activities. Drivers should review their personal policies and consider adding a ride-sharing endorsement to ensure they have adequate coverage.

Lyft insurance and accidents

Lyft offers insurance to its drivers and passengers, which is necessary given that personal car insurance often does not cover accidents that occur while working for a ridesharing company.

Lyft Insurance Coverage

There are three distinct periods that determine your insurance coverage while driving for Lyft:

• Coverage when the app is off: Your personal auto insurance coverage applies. If you rented a car through Express Drive, the standard insurance included applies.
• Coverage when the app is on and drivers are able to receive ride requests: Lyft maintains third-party liability insurance for covered accidents if your personal insurance does not apply, with a minimum of $50,000/person for bodily injury, $100,000/accident for bodily injury, and $25,000/accident for property damage.
• Coverage when the app is on and drivers are en route to pick up passengers, or during rides: Lyft maintains a minimum of $1,000,000 for third-party auto liability coverage for covered accidents. First-party coverages, which may include uninsured motorist coverage, underinsured motorist coverage, personal injury protection (PIP), MedPay, and/or Occupational Accident coverage, are also included. If a driver has comprehensive and collision coverage on their personal auto policy, Lyft maintains contingent comprehensive and collision coverage up to the actual cash value of the car ($2,500 deductible).

Accidents

In the event of an accident, it is important to understand the insurance coverage provided by Lyft and your personal insurance company. If you are in an accident while driving for Lyft, follow these steps:

• If it is an emergency, call 911.
• Connect with an ADT security professional directly from your app. They can share important ride details with 911.
• Report your accident to Lyft's Claims Customer Care team, who are available 24/7 and will guide you through the next steps.

It is worth noting that Lyft's insurance coverage may vary depending on the state and local regulations. For example, in Arizona and Nebraska, the third-party liability insurance limits are lower, and for rides originating in the five boroughs of New York City, Lyft does not procure any liability policy.

Frequently asked questions