Rideshare Insurance: What Is It and Who Needs It?

Fact-checked with HomeInsurance.com

6 min read
1

Car accidents occur unexpectedly and even to the most careful drivers. In 2018, there were 6,734,000 reported crashes around the country. Not only do car accidents happen frequently, but they’re often costly. That’s why it is important to carry insurance on your vehicle.

However, if you’re a rideshare driver, it’s a common misconception that your personal car insurance policy or employer-provided commercial insurance provides full coverage when you’re picking up a passenger and driving them to their destination. Unfortunately, that’s not necessarily the case.

Instead of relying on standard coverages when you’re driving for a company like Uber or Lyft, opt for additional rideshare insurance from a private insurance company. Read ahead to discover more about how rideshare insurance works and whether you should invest in this supplemental coverage.

What is rideshare insurance?

Rideshare insurance is a type of car insurance coverage that fills the gap between your employer-provided insurance and your personal car insurance while you’re driving for a rideshare company. Personal insurance policies do not cover the transport of paying customers from place to place, and employer-provided policies often only cover the minimum and set restrictions on when you are covered. For example, Lyft insurance and Uber driver insurance only extend additional coverage during certain periods, so if you, your vehicle, or other people are injured outside of those windows, you may incur exorbitant out-of-pocket expenses as a result.

Though rideshare drivers are not legally required to purchase extra coverage, they can elect to add rideshare insurance for added protection from accidents that cause damage or injury to themselves or third parties. Rideshare drivers are constantly on the road; driving is their livelihood, so it makes sense that they should invest in more extensive coverage than the average commuter.

Why Uber and Lyft drivers need rideshare insurance

If your job includes driving paying customers from one place to another, then it’s a good idea to purchase rideshare insurance. Since you’ll be left with periods of non-coverage if you rely only on your personal and commercial auto insurance policies, rideshare insurance provides the additional coverage needed to keep you protected at all times.

It’s important to know that employer insurance policies do not keep rideshare drivers covered from end-to-end. Usually, it only covers you and your vehicle while in the process of picking up and dropping off a customer. Ridesharing businesses like Uber and Lyft typically divide coverage periods into the following categories:

  • Offline: When you’re not logged in to your rideshare driver app or you’re using your vehicle for personal business, you are not covered by Uber car insurance or Lyft insurance. Instead, offline driving is typically covered by your personal insurance policy.
  • Period 1 – Waiting for Request: If you’re logged in for work with your rideshare company but you have not been assigned a customer yet, you are ineligible for employer-provided coverage. And since you’re technically on the clock during this time, your personal insurance is also likely to be inactive. This leaves a gap in your insurance coverage, making you and your vehicle vulnerable should an incident occur.
  • Period 2 – On the Way to Pick Up a Customer: Your commercial insurance kicks in once you accept a customer and start driving to pick them up. However, even though you are covered during this period, rideshare companies tend to only provide limited liability insurance. Both Uber driver insurance and Lyft insurance provide coverage of $50,000 per person, $100,000 per incident and $25,000 for property damage.
  • Period 3 – Ride in Progress: Like period two, you’re also covered by your commercial auto policy after you pick up the customer and for the duration of the ride. Upon dropping off your customer, you return to period one status, where you most likely do not qualify for either your personal insurance coverage or your employer-provided coverage.

The top rideshare insurance companies

Many of the best insurance carriers offer some type of rideshare insurance coverage. Some companies offer a rideshare insurance policy that is similar to your personal auto insurance policy. Others offer a rideshare endorsement, which is an add-on policy you can purchase on top of your existing personal car insurance policy. Lastly, some insurance providers can add a TNC extension (Transportation Network Company) onto your personal car insurance policy for more coverage. Some of the top providers for rideshare insurance include:

  • Allstate (offers a ride for hire endorsement)
  • Geico (offers a standalone rideshare insurance policy)
  • State Farm (offers a TNC endorsement)
  • Farmers (offers a rideshare endorsement)
  • USAA (offers a rideshare gap coverage endorsement)
  • Progressive (offers a rideshare endorsement)

Keep in mind that rideshare insurance is not available in every state, so it’s crucial to research different providers to determine whether or not this supplemental coverage is an option where you live. If you live in a state where rideshare insurance coverage is unavailable, you should consider purchasing commercial insurance to keep you protected at all times.

Allstate

  • Type of coverage available: Ride for hire endorsement
  • States available: Alabama, Arkansas, Arizona, California, Colorado, Connecticut, Delaware, Georgia, Hawaii, Idaho, Iowa, Illinois, Indiana, Kansas, Kentucky, Louisiana, Massachusetts, Maryland, Maine, Minnesota, Missouri, Mississippi, Montana, North Carolina, North Dakota, Nebraska, New Hampshire, New Jersey, New Mexico, Nevada, Ohio, Oregon, Oklahoma, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Utah, Virginia, Vermont, Washington, Wisconsin, West Virginia, Wyoming, Washington D.C.
  • Cost in addition to personal policy premium: $15-$20 annually

Geico

  • Type of coverage available: Ridesharing Policy that replaces existing personal policy
  • States available: Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Hampshire, New York, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming
  • Cost in addition to personal policy premium: $25 per month

State Farm

  • Type of coverage available: Transportation Network Company (TNC) Driver Coverage endorsement
  • States available: Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Vermont, Virginia, Washington, Washington, DC, West Virginia, Wisconsin, Wyoming
  • Cost in addition to personal policy premium: 15-20% above annual premium

Farmers

  • Type of coverage available: Rideshare endorsement
  • States available: Alabama, Arizona, Arkansas, California, Colorado, Delaware, DC, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Maryland, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, New Jersey, New Mexico, North Dakota, Ohio, Oklahoma, Oregon, South Dakota, Tennessee, Texas, Utah, Virginia, West Virginia, Wisconsin
  • Cost in addition to personal policy premium: $15 per month, 8% in California

USAA (only available to US military members and their families)

  • Type of coverage available: Rideshare gap coverage, which is an endorsement added to an existing personal policy
  • States available: Alabama, Arizona, Arkansas, California, Colorado, Connecticut, District of Columbia, Delaware, Florida, Georgia, Idaho, Iowa, Illinois, Indiana, Kansas, Kentucky, Louisiana, Massachusetts, Maryland, Maine, Minnesota, Missouri, Mississippi, North Dakota, Nebraska, New Hampshire, New Jersey, Nevada, Ohio, Oklahoma, Tennessee, Texas, Utah, Vermont, Washington, West Virginia, Wisconsin, Wyoming.
  • Cost in addition to personal policy premium: $6-$8 per month

Progressive

  • Type of coverage available: Rideshare endorsement
  • States available: Alabama, Arizona, Arkansas, Colorado, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, New Mexico, North Dakota, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Dakota, Tennessee, Texas, Utah, Virginia, Washington, Washington D.C., West Virginia, Wisconsin, Wyoming
  • Cost in addition to personal policy premium: Calculated based on miles driven while working as a rideshare driver

How much is rideshare insurance?

It’s difficult to determine the average price of rideshare insurance because the cost varies by state. Additionally, your premium is affected by your driving history, geographic location, credit history, claims history, the age of your car and more. It also depends on the type of policy you have. For instance, a rideshare insurance policy will be more expensive than a rideshare add-on to your existing policy.

However, some insurance providers that sell rideshare insurance advertise that the price is affordable. USAA claims that adding a rideshare add-on to your existing policy will only cost between $6-$8 per month. Meanwhile, Farmers says that the same coverage will cost about $15 per month.

How to buy rideshare insurance

Some car insurance providers allow you to extend your personal insurance policy or add a new TNC policy through their websites or online portals. Others, like Farmers, require you to call and speak to an agent. When discussing coverage options with your insurer, be sure to tell them you are working as a rideshare driver. They’ll give you a personalized quote based on your location, personal information and driving history. It’s a good idea to get price quotes from multiple providers to determine which company can give you the best rate.

Frequently asked questions:

Do I need to tell my personal car insurer that I am driving for Uber or Lyft?

If you want your insurance policy to keep you covered from the start of your workday until the end, you should certainly inform your auto insurance provider that you are a rideshare driver, so you can add on extra endorsements or extensions as needed.

What if rideshare insurance isn’t offered in my state?

If rideshare insurance isn’t an option in your state, consider purchasing a commercial insurance policy. Though commercial policies are more expensive, they provide the needed coverage to keep you and your assets protected.

Do I really need extra rideshare insurance if I already have personal and employer-provided policies?

Yes, even with both personal policy coverage and employer-provided insurance, you can be left vulnerable during certain parts of your workday as a rideshare driver. Rideshare insurance bridges the gap between those two policies, keeping you safe even when you aren’t in the act of transporting a customer.

Do delivery drivers need rideshare insurance?

When it comes to insurance, delivery drivers are in a similar situation to rideshare drivers. If you’re delivering for a service like Uber Eats or GrubHub, you’re only covered by your personal car insurance policy during certain times. For instance, you might be covered while you’re driving to a restaurant to pick up an order, but you’re not covered while you’re logged into the app and are waiting to accept an order. Because of that, having rideshare insurance as a delivery driver is important.