Alyssa Lane
If you're a rideshare driver, you may want to consider purchasing rideshare insurance. This type of insurance is an add-on to your regular auto insurance policy, filling in the gaps in coverage provided by rideshare companies like Uber and Lyft. While these companies do offer some insurance, it is often limited and may not cover all the costs in the event of an accident. Rideshare insurance can help protect you financially and legally, and may be worth the investment for added peace of mind. However, it's important to note that not all insurance companies offer rideshare insurance, and it may increase your insurance rates.
| Characteristics | Values |
|---|---|
| Purpose | To increase coverage while driving for ridesharing companies like Uber and Lyft |
| Cost | Typically under $100 per year; $10 to $350 per year depending on location and insurer; $87 per month for liability coverage and $99 for full coverage |
| Coverage | Bridges the gap between personal auto policy and coverage provided by ridesharing companies; covers Period 1 when the driver is active on the app but not matched with a passenger |
| Benefits | Provides extra protection for rideshare drivers who are on the road more often and for longer periods, reducing the risk of being involved in an accident; prevents insurance company from cancelling the policy for being a rideshare driver |
| Drawbacks | May not be legally required to work as a rideshare driver in certain locations; can increase insurance bill if coverage limits need to be raised |
| Alternatives | Commercial auto insurance; purchasing coverage from ridesharing companies (e.g., Uber, Lyft) |
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What You'll Learn
Filling insurance gaps
If you're a rideshare driver, it's important to understand the insurance gaps you may encounter and how to fill them. Standard personal auto insurance policies typically do not cover ridesharing, leaving you vulnerable to financial risk in the event of an accident. Here's how you can address these gaps:
Understand the Periods of Ridesharing
Ridesharing companies like Uber and Lyft divide the time you spend working into periods, each with different insurance considerations:
- Period 0: Your app is off, and your personal insurance policy is active.
- Period 1: Your app is on, but you haven't received a ride request yet. Your personal policy won't cover you here, so you'll need rideshare insurance or the company's contingent insurance, which only provides liability coverage.
- Period 2: You've accepted a request and are en route to pick up the passenger. Your rideshare insurance, with its higher liability coverage, kicks in.
- Period 3: The passenger is in your car, and you're driving them to their destination. Uber and Lyft cover you during this time, but there is a deductible you must pay before their insurance applies.
Purchase Rideshare Insurance
Rideshare insurance is an add-on to your normal auto insurance policy, filling in the gaps left by your personal policy and the ridesharing company's insurance. It is relatively affordable, typically costing under $100 per year to add to your existing policy. When shopping for rideshare insurance, be sure to ask for a quote and compare rates, as not all insurance carriers offer it. Companies like Allstate and State Farm are known to provide rideshare insurance.
Consider Comprehensive and Collision Coverage
As a rideshare driver, you depend on your vehicle for income. Comprehensive coverage reimburses you for non-collision events like vandalism and natural disasters, while collision insurance covers damages to your car regardless of fault. Adding these coverages ensures that you can get your vehicle fixed and back on the road quickly after an incident.
Be Aware of Deductibles
Both Uber and Lyft have deductibles of around $1,000 to $2,500, which you must pay out of pocket before their insurance coverage kicks in. When purchasing rideshare insurance, consider the deductible amount. A lower deductible results in higher premiums but reduces your expenses after a claim, while a higher deductible lowers your rates but leads to higher out-of-pocket costs.
By addressing these insurance gaps, you can ensure that you're adequately protected while working as a rideshare driver.
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Cost of rideshare insurance
The cost of rideshare insurance varies depending on the insurance company, the driver's location, and their driving history. It is designed to bridge the gap between a driver's personal auto policy and the coverage provided by ridesharing companies like Uber and Lyft.
Rideshare insurance is typically an optional add-on to a personal car insurance policy. While some companies do not disclose the cost of their rideshare endorsements, others charge a few extra dollars a month, with an average of around $94 per year. The cost of adding rideshare coverage can be as low as $10 per year and go up to $350 per year, depending on the location and insurer.
For Florida drivers, the average cost of a rideshare policy is $87 per month for liability coverage and $99 for full coverage. State Farm and GEICO offer the lowest monthly premiums for rideshare liability insurance in Florida, with rates of $84 and $87, respectively. USAA also offers affordable rates for rideshare drivers, but their services are exclusive to military members and their families.
State Farm is a popular choice for rideshare insurance, as it enables drivers to increase their coverage across all three ridesharing periods. Their policy also allows drivers to bypass the insurance company hired by their rideshare company in the event of a claim.
Overall, the cost of rideshare insurance is relatively affordable and can provide valuable peace of mind for drivers concerned about coverage gaps.
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Rideshare insurance for delivery drivers
Rideshare insurance is a type of add-on policy that fills the gaps in coverage between a driver's personal auto insurance policy and the insurance provided by a transportation network company. It is not a stand-alone product but an addition to an existing policy.
Rideshare drivers are technically independent contractors, so they need to fill some insurance gaps themselves. This is especially important for delivery drivers who, although they do not have passengers in their car, are still at risk of accidents. As a rideshare driver, you depend on your vehicle for income, so not being able to get it fixed after a crash means you won't be able to earn money.
Rideshare insurance is worth it for the extra protection it offers. It is also a good idea to add comprehensive and collision coverage. If you are a delivery driver, you may need to get commercial insurance, as your vehicle is being used for business purposes. This depends on the state in which you drive and the coverages and limits provided by each company.
The cost of rideshare insurance varies. It typically costs under $100 per year to add to an existing policy, with commercial auto insurance costing $1,200 to $2,400 or more per year. A cheaper alternative is rideshare insurance, which costs $10 to $350 per year, depending on your location and insurer.
Some insurance companies, such as State Farm, will cover food delivery under your regular policy in most states. However, other companies will require you to get a rideshare endorsement or commercial policy to deliver food. It is important to consult with your insurer before signing up as a delivery driver.
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Rideshare insurance requirements by state
While ridesharing has led to a decrease in traffic fatalities, it has also resulted in an increase in insurance costs for both rideshare drivers and personal vehicle owners. This is due to high insurance limits that have made the industry a target for litigation, particularly in states like Georgia, Louisiana, and Nevada, which have unique requirements.
In Georgia, Transportation Network Companies (TNCs) must have at least $100,000 per person and $300,000 per incident in uninsured motorist/underinsured motorist (UM/UIM) coverage when a passenger is in the vehicle. Louisiana has the highest insurance costs per mile due to unbridled lawsuits, and in Nevada, TNCs are required to have $1.5 million in liability coverage when a passenger is in the vehicle.
State laws in the US require rideshare drivers to have commercial auto insurance because personal auto insurance typically doesn't cover accidents that occur while earning on ridesharing platforms. Each state sets its own commercial auto insurance requirements, which vary significantly. While most states allow the driver, the ridesharing company, or a combination of both to meet these requirements, companies like Uber provide commercial auto insurance for their drivers to avoid costly annual policies.
Rideshare insurance is a specialised type of insurance that bridges the gap between a driver's personal auto policy and the coverage provided by ridesharing companies. It is designed to protect drivers from financial risks associated with accidents and other incidents that may occur while working for ridesharing companies. While it may not be legally required in all states, it is highly recommended for rideshare drivers to add an endorsement to their policy to ensure sufficient coverage.
Rideshare drivers are encouraged to consult their insurer and review the specific requirements and offerings in their state. Companies like State Farm offer rideshare coverage, allowing drivers to customise their deductible amount and extend their personal auto policy coverage while driving for a TNC.
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Rideshare insurance requirements by company
If you are a rideshare driver, it is likely worth getting additional insurance coverage. While companies like Uber and Lyft do provide insurance for their drivers, it does not cover all scenarios and has high deductibles of $1,000 and $2,500, respectively. Therefore, it is recommended that rideshare drivers increase their insurance coverage limits and add comprehensive and collision coverage.
State Farm
State Farm is unique in that it enables you to increase your coverage for all three ridesharing periods. Their policy also allows you to bypass the insurance company hired by your rideshare company if you have a claim. However, there have been complaints about their customer claims service.
Allstate
Allstate offers rideshare insurance as an optional add-on to a personal car insurance policy. Their coverage helps fill the gaps in coverage between a customer's personal auto insurance policy and the coverage provided by a transportation network company. Allstate's rideshare insurance covers Periods 2 and 3 and helps with the high deductibles in your Uber or Lyft coverage. For example, if your personal deductible is $500, Allstate will give you $500 if you drive for Uber or $2,000 if you drive for Lyft to help pay your bills. Allstate's "Ride for Hire" endorsement is available in certain states and may add $15 to $20 a year to your premium.
GEICO
GEICO offers rideshare insurance coverage for all three periods. The company states that the cost for rideshare insurance, which comes with a $250 deductible, is slightly higher than a personal auto policy.
Farmers Insurance
Farmers Insurance offers rideshare coverage during Period 1, when the app is on and the driver has not yet picked up passengers. They also provide rideshare coverage in Florida under its Foremost brand.
Mercury Insurance
Mercury Insurance offers rideshare coverage for Uber and Lyft drivers in California, Arizona, Nevada, Florida, Oklahoma, Georgia, Texas, Illinois, and Virginia. Their insurance helps fill liability gaps and provides excess coverage when the Transportation Network Company (TNC) coverage is not in effect. Mercury's rideshare insurance does not replace or extend the coverage provided by Uber or Lyft during Period 2 (after a ride request is accepted) or Period 3 (when there is an active ride in progress).
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Frequently asked questions
Rideshare insurance is an add-on to your normal auto insurance policy that protects you when you’re driving for a company like Uber or Lyft.
Your personal auto insurance is unlikely to cover accidents you’re involved in. Uber and Lyft do provide insurance for their drivers, but it doesn't cover all scenarios and has a high deductible. Rideshare insurance fills the gaps in coverage and is therefore worth it.
Rideshare insurance typically costs under $100 per year to add to an existing policy. Commercial auto insurance for Uber drivers can cost $1,200 to $2,400 or more per year, whereas rideshare insurance is much cheaper at $10 to $350 per year, depending on your location and insurer.
Not every insurance carrier sells rideshare insurance, so you may need to get commercial insurance. Companies that do offer rideshare insurance include Allstate, State Farm, Progressive, and Geico.
