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Do I need rideshare insurance? What is rideshare auto insurance? If you are a driver and you find yourself asking these questions, take a moment to read this article and understand what rideshare insurance covers and why it is so important. In most cases, if you drive a personal vehicle for a ridesharing application such as Uber or Lyft, the insurance policies provided by the rideshare companies will not cover you fully in case of an accident.
Luckily, as the ridesharing market has boomed in popularity, auto insurance carriers have developed unique insurance plans that will cover you for both your personal driving and for the periods of time you are picking and dropping off passengers.
Before we get into different policies, it is important to understand the 4 coverage periods that a typical driver will find themselves in.
Daily routine trips that have nothing to do with ridesharing. Your personal policy covers you.
Period 1, when a driver has logged into the app and is waiting for a ride request, is when drivers are the most vulnerable for an insurance gap. Your personal policy doesn't cover this period and Uber and Lyft insurance is limited to a small amount of liability coverage.
The rideshare company's policy will cover most expenses during this period.
You are fully covered by the rideshare company's policy.
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In the below chart, we have outlined what Uber and Lyft will cover during each period.
Company | Maximum Coverage Amounts in Period 1 | Maximum Coverage Amounts in Periods 2 & 3 | Deductible |
Uber | $100,000 per incident, $50,000 per person | $1 Million | $1,000 |
Lyft | $100,000 per incident, $50,000 per person | $1 Million | $2,500 |
As you can see, while Uber and Lyft may cover up to a million dollars, the deductible is very steep. Rideshare insurance can help with this among other expenses.
Rideshare insurance has gaps. As highlighted above, rideshare insurance coverage only applies after you have accepted a ride request but will not cover you while you wait for a ride.
Not only is your personal insurance unlikely to cover any incidents while your rideshare drivers app in on, you could even find yourself with a completely cancelled policy if you haven't disclosed your side hustle to your carrier.
Not all insurance companies offer rideshare insurance policies. If yours doesn’t, it’s time to look elsewhere, who knows you may even find a better rate! Our rideshare insurance finder can help you easily find a quote in seconds.
Like personal auto insurance, rideshare insurance costs depend on multiple factors such as your location, driving record, the amount of coverage you desire, the number of miles you drive your car, etc. Typically we see the add-on of rideshare insurance to be about $5 - $18 extra per month but depending on which insurance carrier you go with, you may be able to reduce your insurance cost altogether.
Hopefully you never find yourself in this situation as the ramifications for getting into an accident without the proper insurance coverage can be very costly. If you are in this situation and your personal insurance carrier will not cover you, the coverage from your rideshare company should take away some of the burden, however, it may be a relatively small amount depending on when (what period) you had your accident.
There are some states that currently do not offer rideshare insurance. Check to see if your state is one of these and if so, contact your insurance provider to get advice on what you should do.
In short, yes. Many states require rideshare insurance if you are driving customers for money, regardless of the application.
Looking for more information, check out this Rideshare Insurance Thread on our Forum and discuss options with other drivers.
RIDEGURU
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