Affordable Ridesharing Insurance Quotes
So, you’re a ride-hailing driver, generating extra cash by transporting others using your personal vehicle. You love the privilege of harmonizing your own schedule and criss-crossing the city with friendly passengers in tow. What’s not to love? For starters, the coverage gap in your auto insurance policy when you’re driving for a transportation network company (TNC) — think Uber or Lyft.
Virtually every insurance provider’s auto policies don’t include coverage for incidents that occur when you use your personal vehicle to carry paying passengers—and that’s where ridesharing insurance comes in. It’s an add-on insurance that fills the gap in coverage between your personal auto policy and the cover provided by your ridesharing company. It extends the coverage you’ve already purchased to the time spent driving for a TNC.
Did you know that your personal auto policy isn’t effective the entire time your TNC app is active? Use our guide to get the inside scoop on ridesharing insurance, including how it works, where to get it, and how much it costs.
What is Ridesharing Insurance?
Fancy a ride-hailing gig with companies like Uber and Lyft? Well, driving for money has its fair share of perks: independence, flexibility, and the ability to generate extra income on your own schedule. However, it may also mean extra insurance protection too. Let’s dive into the particulars of ridesharing insurance.
Lyft and Uber Insurance
Lyft and Uber usually maintain auto insurance on your behalf when you drive with them. However, this insurance offers very limited value and may come with unpleasant surprises—if you don’t know how it works. These TNC companies break down the ridesharing process into four activity periods:
- Period 0: You’re in your vehicle but aren’t logged into the Uber or Lyft app. Your chosen personal insurance carrier and coverages apply to any accident that occurs.
- Period 1: When you’re available or waiting for a ride request. Uber and Lyft will provide liability coverage for any accident that occurs as a result of the driver’s fault — if their own personal insurance doesn’t apply. This is entirely third-party insurance, so it only covers losses sustained by others or their property. This coverage pays:
- $50,000 in bodily injury per person
- $100,000 in bodily injury per accident
- $25,000 in property damage per accident
- Period 2: You’ve accepted the ride request and are en route to pick up the rider. Your Lyft or Uber insurance will provide coverage.
- Period 3: During the trip;passenger in the car. Uber and Lyft maintain the following auto insurance on your behalf in case of a covered accident:
- $1,000,000 third-party liability
- Underinsured/uninsured motorist bodily injury
- Contingent comprehensive and collision, up to the car’s actual cash value ($1,000 deductible for Uber and $2,500 deductible for Lyft)
Ridesharing Insurance for Delivery App Drivers
Are you driving for an on-demand delivery service like Amazon Flex, Instacart, Grubhub, or similar service? Your personal auto insurance policy doesn’t cover you while you’re at work. And if your company offers car insurance, be sure to read the policy’s fine print—coverage differs by company and may be limited.
For instance, DoorDash claims to offer excess auto insurance but this policy only applies to the damage you may cause to third parties—and only to accidents that occur when you’re in possession of the goods to be delivered. Instacart and Grubhub treat their drivers as independent contractors—so you’re responsible for your own insurance.
And similar to ridesharing companies, the insurance your on-delivery service provides will depend on these four periods:
- Period 0: Your delivery app is off. Your personal auto insurance policy takes effect.
- Period 1: Your app is on; you’re waiting for a match. Your personal auto policy doesn’t cover you, plus there’s limited coverage under your rideshare company’s insurance.
- Period 2: Request accepted and you’re driving to pick up the delivery. Some companies will provide coverage while others won’t.
- Period 3: The goods ordered are in your car. Your delivery service’s policy is in effect.
What Your Personal Car Insurance Policy Covers
You obviously know that you need to carry auto insurance if you want to stay on the road. Check out what your personal car insurance policy covers.
- Liability coverage. Most states mandate auto liability coverage—you must carry at least the minimum amount of liability coverage set by the state law. There are two components in liability coverage:
- Bodily injury liability pays for the costs related to another person’s injuries if you’re at fault.
- Property damage liability covers the cost of repair or replacing another person’s property damaged while you’re driving.
- Comprehensive coverage. Comprehensive covers damage to your vehicle by a covered peril, with the exception of a collision. This includes things like fire, theft, vandalism, hail, or hitting an animal. Comprehensive coverage has a deductible—the amount you pay out-of-pocket before your insurer compensates you for a covered claim.
- Collision coverage. Collision coverage helps cover the cost of repairing or replacing your car if you hit another object, including trees, curbs or another vehicle. It covers you regardless of fault.
- Uninsured/underinsured motorist coverage. Uninsured/underinsured coverage pays for injuries to you and your passengers if the at-fault driver doesn’t have liability insurance or their insurance isn’t enough.
- Medical payments coverage. It pays for medical and funeral expenses if you’re injured or killed in an accident—up to your limits.
What Rideshare Insurance Should Cover
As we’ve clarified earlier, rideshare insurance is supposed to provide gap coverage from the moment you turn on your ridesharing app to when you’re matched with a passenger—often called the ridesharing period. During this period, your personal auto policy doesn’t cover you—and coverage from your rideshare company is limited.
That said, the specifics of what your rideshare insurance covers will vary depending on your state, carrier, and the type of policy you choose. However, you’ll typically get the same coverage that your personal auto policy offers, including:
- Bodily injury and property damage liability
- Comprehensive coverage
- Collision coverage
- Medical payments
- Uninsured and Underinsured motorist
- Personal injury protection
Remember, if you don’t carry the right coverage but still use your personal car to earn an income through a rideshare company, your insurance provider won’t cover you in the event of an accident. Moreover, your insurer may decide to drop your coverage altogether—if they discover you’ve been operating without proper insurance.
How to Shop for Rideshare Insurance
You’re considering adding the protection that lets you enjoy all the advantages of being a rideshare driver, where do you start? Well, rideshare insurance isn’t a stand-alone policy. It’s either a hybrid policy or an endorsement to an already existing personal auto policy. You must obtain it from the company that provides your personal auto coverage.
Comparison shopping is the first step in buying rideshare insurance. Other steps you should take to purchase the best coverage include:
- Notify your auto insurance carrier about your current rideshare driver status. It will help you avoid being dropped.
- Identify any gaps in your personal policy and your rideshare company’s insurance. Liability coverage varies, so look for any benefits that distinguish companies from each other.
- Find out whether your current insurance provider can fill the gaps in your rideshare company’s coverage (if it doesn’t already offer a commercial policy). Compare the costs for both options.
- Will you add other policies, like homeowners, to your personal auto policy? It could score you some discounts.
Approach different companies to widen your comparison net. And if you must use an insurance agent, ensure they understand Uber or Lyft.
Where to Get Rideshare Insurance
You’ll get rideshare insurance from big-name auto insurance providers, like Progressive, State farm, and Geico. Keep in mind, rideshare insurance isn’t available everywhere—and requirements may vary by state. You may consider a ridesharing endorsement, or go commercial.
How Much is Rideshare Insurance?
The cost of rideshare insurance greatly depends on the type of coverage you purchase. For example, a rideshare endorsement will cost less than a rideshare policy whose coverage is independent of your auto policy. Costs will also vary by the provider and your state.
Similar to most insurance coverages, you’ll likely pay more if you choose higher limits. If you choose a rideshare endorsement, you’ll realize that your rideshare coverage limit is equal to what’s set for your personal auto policy. A separate rideshare insurance policy will have different limits. Ridesharing coverage premiums cost as low as $20 per year.
Besides the premiums, you must consider the deductible — the amount you must pay before your insurance provider pays out your benefits. Overall, a lower deductible will increase your annual premium, so a higher deductible may help you save on insurance. Factors like your driving record and how often you drive will also impact your premiums.
Rideshare More, Worry Less
All good rides come to an end — your coverage shouldn’t. We understand that working as a rideshare driver only complicates the seemingly straightforward relationship between personal auto insurance and commercial insurance. Luckily, rideshare coverage takes away the guesswork by extending your personal auto policy while you’re making extra cash through Lyft and Uber. And it costs less than what many drivers would think, making it well worth the price.
Looking to join the ride-hailing services’ bandwagon? Start with a few online quotes to understand your rideshare insurance options.
Frequently Asked Questions About Ridesharing Insurance
Do I need to tell my personal car insurer that I am driving for Uber or Lyft?
Absolutely! It’s important that you notify your personal auto insurer about your ridesharing driver status. Your personal insurance policy doesn’t cover you or your car when you’re using it for commercial purposes—this includes driving for Uber or Lyft. Your insurer will deny paying out on a claim if you were transporting paying passengers unbeknownst to the insurance company. Besides, personal auto insurance won’t suffice if it’s discovered you used the vehicle for business purposes.
Contact your personal car insurer before driving for Uber or Lyft to ensure you’re not violating any of the terms in your policy.
Does my Uber Insurance affect my personal car insurance?
Your Uber insurance doesn’t automatically affect your personal car insurance. However, your Uber insurance policy may be expanded if you’re already paying for comprehensive and collision coverage on your personal policy. Be sure to contact your insurance provider for more information.
Why do I need Uber Insurance if I’m already covered as a driver?
While you’d technically consider it additional insurance, the truth is that you need your own coverage if you’re a commercial driver who carries passengers for profit. Your own coverage as a driver isn’t enough. You need to ensure you’re financially protected in the event of an accident, especially when you have passengers on board. You don’t want to end up using the extra money earned to cover an expensive legal battle.
Do I still need regular car insurance if I drive for Uber?
Yes, you do. Remember, the insurance your TNC maintains on your behalf—when you drive for them — doesn’t stand in for your regular car insurance. Since it only covers you during the period you’re logged into the app, your regular car insurance will cover any accident that happens outside of this period. Read your plan fine print carefully to ensure there are no gaps in coverage.
Do delivery drivers need rideshare insurance?
You need rideshare insurance if you drive for an on-demand delivery company, like Grubhub because:
- Your personal auto insurance leaves gaps in coverage—it won’t cover the cost of injuries, repairs, or property damage when you’re driving for an on-demand delivery company.
- Your insurance company may cancel your personal policy if it discovers you’re ridesharing
- Insurance from your company won’t cover all situations
Will my personal car insurance cover ridesharing?
Your personal auto insurance policy won’t provide coverage for ridesharing. Your personal auto coverage stops when you log into the ridesharing app up to the moment the passenger exits your car and completes the transaction. This coverage gap means that you’ll end up paying all expenses out-of-pocket if you’re involved in a car accident while on the clock.
