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Did you know that your personal auto insurance policy and the coverage provided by Lyft or the policy provided by Uber do not cover you for all possible accident situations?
Insurance For Rideshare Drivers
Rather than remain exposed to potential liability if you cause an accident while driving as a passenger for a rideshare app, you’ll probably want to purchase additional rideshare insurance.
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In this article, you’ll learn everything you need to know about rideshare insurance and which carriers to compare when shopping for coverage.
If you drive for a rideshare company, you need to pay attention to how auto insurance does and doesn’t protect you while you’re on the road.
Commercial auto insurance, like TLC insurance, usually costs more than personal coverage because of the additional risks involved in commercial driving.
When a rideshare driver decides to forgo purchasing extra coverage because it costs more than their personal use policy, there is a “gap” in coverage that leaves them legally exposed.
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As the name suggests, rideshare insurance is a form of commercial auto insurance that is particularly suited to modern cab drivers called rideshare drivers.
Rideshare insurance covers the gap in coverage between the insurance that Lyft or Uber provides to its drivers and your personal auto insurance benefits.
Rideshare drivers do not need to purchase additional rideshare insurance because the law does not make it a requirement.
However, it’s a good idea to invest in rideshare insurance if you want to protect yourself from potential liability.
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You need to ask yourself if you can afford to pay for tens of thousands or hundreds of thousands of dollars in physical injuries during a car accident.
If the claims process reveals that your personal auto policy or the rideshare company’s policy doesn’t cover you, then you’re in trouble.
If you’re an Uber or Lyft driver, the rideshare company’s insurance policy covers you when you’re “on the clock.”
You are “on the clock” when you accept a ride, drive to pick up a passenger, and complete a drop-off.
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Coverage only lasts from when you accept a ride request until you arrive at your destination.
In return, drivers get a way to cover their liability in the event they get into an accident while driving for Uber or Lyft.
Rideshare covers the commercial insurance gap between your regular policy and the insurance provided by Lyft or Uber.
Commercial auto insurance covers damage to other vehicles, injury to other people, and other property damage that results from a car accident.
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Personal auto insurance sometimes subsidizes the cost for certain benefits, but commercial coverage will likely charge additional fees for each of these included extras.
Rideshare insurance will likely charge extra for these two types of claims because of the increased risk of accidents when you drive for Uber or Lyft.
Most rideshare insurance premiums include medical payments coverage, but it may not always stay the same amount as your personal insurance policy.
Rideshare companies typically have $1,000 to $5,000 worth of additional medical expenses coverage, depending on the state you live in.
Insurance For Rideshare Drivers
If you don’t, and an accident occurs while driving for Uber or Lyft, your personal auto insurance won’t cover any costs resulting from the incident.
Let’s say you don’t want to buy rideshare insurance. In that case, many insurance companies provide a ridesharing endorsement that allows personal auto policies to extend their commercial coverage while you drive for Uber or Lyft.
Rideshare insurance is usually more expensive than personal coverage because you are managing passengers instead of family members or friends.
When you buy insurance from an auto insurer, you are buying an agreement that you will receive monetary benefits when making a claim in a car accident.
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The difference is that you enter into an agreement that ensures that your liability remains covered if an accident occurs while driving passengers for Uber, Lyft, or another rideshare company.
If you have assets such as cars or homes that need to be protected from lawsuits, you should consider purchasing additional rideshare insurance.
You can visit friends, drop the kids off at school, go get groceries, or drive to and from your regular job.
A Phase 0 accident will not include coverage provided by a rideshare company or any additional rideshare insurance added to your policy.
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You will usually pay any deductibles stated within your personal policy if you have a Phase 0 accident.
Most people have deductibles of $250, $500, or $1,000. Check your policy, so you know what your deductibles are on your personal policy.
Their value on the hook is lower than when you enter Phase 2 or 3 because you are still not actively engaged in providing rides to passengers.
In Phase 2, you’ve accepted a rideshare request and are on your way to pick up a customer.
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Remember that a rideshare company’s policy only pays out in Period 1 to cover damage you cause to another driver.
Or, if you cause more than $25,000 in property damage or more than $100,000 in personal injury to someone, you will have to pay the extra money.
This is like the coverage provided in Phase 1, except it carries $1 million in coverage instead of $100,000.
You will receive benefits if an underinsured or uninsured person causes an accident that injures you or a passenger in your vehicle.
Insurance Coverage For Rideshare Drivers
You should carry the same protection in your personal policy up to the same amount that the rideshare companies provide.
You will learn the pros and cons of each carrier, the prices offered, and where they offer coverage for rideshare insurance.
It is one of the top insurance companies across the board. USAA provides great coverage at low prices.
You can start every claim online and call a USAA representative to help you with almost anything related to the claim.
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Mercury covers you no matter how many passengers are in your vehicle at the time of the accident.
Contact a Mercury agent to get a free quote, choose your coverage limits, and set up your deductibles.
Allstate is one of the best rideshare insurance companies because its policies sometimes allow you to avoid paying the deductible charged by Lyft or Uber.
You can enjoy this type of deductible gap coverage if you have an accident after turning on the rideshare app.
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Deductible gap insurance for Lyft and Uber drivers remains in effect for each trip from start to finish.
You can save thousands of dollars on the Lyft or Uber deductible, which you will pay with some other insurance company plans.
We like their proactive approach to ensuring their rideshare driver customers remain protected in the event of an accident with Uber or Lyft.
Unlike some carriers, Progressive lets you keep endorsements active on your regular personal policy while driving for Lyft or Uber.
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You can use State Farm if you drive for Uber, Lyft, Postmates, Grubhub, and other transportation network companies.
State Farm focuses on bridging the gap between your personal policy limits and the coverage offered by Uber or Lyft.
Depending on your state, you may still find that rental car reimbursement, roadside assistance, and medical benefits remain in place while driving for a rideshare company.
The company asks that you call an agent to find out in which states it offers rideshare coverage.
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Farmers works well for drivers of all major apps, such as Lyft, Uber, DoorDash, Grubhub, and Amazon Flex.
It can be tricky to establish the types of coverage and deductibles that Farmers offers because they don’t list much information on their website.
The best way to determine how much rideshare insurance is in your area is to get a quote from an agent at Mercury, USAA, Progressive, State Farm, or Farmers.
If you have a different preferred insurance company, you can also call them and ask for a rideshare insurance quote.
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Your driving record and any potential discounts you qualify for also dictate how much your rideshare add-on coverage will cost.
Auto insurance in general, and rideshare insurance in particular, requires a conversation as you try to understand the coverages that work best for you.
Don’t settle on any rideshare policy until you fully understand your coverages and when they kick in during a potential accident.
Even with the breakdown we’ve provided above, you may still have a question or two about rideshare insurance.
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It takes a bit of reading and understanding to finally see what it is and why you need it as a rideshare driver.
In general, yes. State Farm, Farmers Insurance, and Mercury will not accept claims that do not meet your personal deductible for non-rideshare coverages.
You can run into a lot of trouble if you try to file a claim outside of your private insurer’s deductible.
Can you imagine having to pay hundreds of thousands of dollars for the rest of your life because you didn’t get the required rideshare insurance before working for Lyft or Uber?
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Are you a rideshare driver? Rideshare insurance offers peace of mind with additional coverage to protect you when your personal insurance doesn’t.
If you don’t already have rideshare insurance, do so immediately before turning your driver app back on.
Brett Helling is the owner of . He has been a rideshare driver since early 2012, after hundreds of trips for
