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There’s a common misconception that your personal car insurance policy or employer-provided commercial insurance also covers you if you drive your car for a rideshare service like Uber or Lyft. However, if you’re a rideshare driver, you will likely need to add an endorsement to your car insurance or opt for additional rideshare insurance from a private insurance company. Bankrate looks into how rideshare insurance works and why you might need this supplemental coverage.
- Insurance offered by companies like Uber or Lyft may have some limitations to its coverage, which is why rideshare insurance can help to fully protect your finances.
- Rideshare insurance is not typically included with standard auto insurance coverage.
- While most major car insurance carriers offer a rideshare endorsement that can be added to your personal car insurance policy, this may not be the case in all states.
What is rideshare insurance?
Rideshare insurance is a type of car insurance coverage that fills the gap between the commercial car insurance policy provided by your rideshare employer and your personal car insurance. Individual 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 specific periods, so if you, your vehicle, or other people are injured outside of those windows, you may incur high 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 because driving is their livelihood, so it makes sense that they should consider investing 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, it may be 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 financially protected at all times.
It’s important to know that employer insurance policies do not keep rideshare drivers covered from end to end. Usually, a rideshare employer’s commercial policy only covers you and your vehicle while 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 use, you are not covered by commercial car insurance provided by Uber or Lyft. Instead, offline driving is typically covered by your personal car 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 may be ineligible for employer-provided coverage. And since you’re technically on the job during this time, your personal insurance is also likely to be inactive. This leaves a gap in your insurance coverage, leaving you and your vehicle financially 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 only to provide limited liability insurance. Both Uber driver insurance and Lyft driver insurance provide bodily injury liability coverage of $50,000 per person, bodily injury liability coverage of $100,000 per incident and $25,000 for property damage coverage.
- 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 car insurance companies now offer rideshare coverage to drivers, either as a separate car insurance policy or a rideshare endorsement that can be added to existing personal auto insurance policies. Below, Bankrate’s experts reviewed top car insurance carriers for rideshare coverage. While we do not have premiums available specifically for rideshare coverage, we have shared each company’s average annual cost for full coverage car insurance to give you a starting point if you are shopping for a new policy with a company that also offers rideshare coverage.
However, keep in mind that coverage, policy costs and regulations may vary by state, so it’s crucial to research how you can get covered for rideshare driving where you live. If you live in a state where rideshare insurance coverage is unavailable, you might want to consider purchasing commercial insurance to keep yourself financially protected at all times.
|Company||Offers rideshare endorsement||Type of endorsement offered (if offered)||Offers standalone policy||Average annual cost for personal full coverage policy|
|Allstate||✔||Ride for hire endorsement||✖||$2,438|
|State Farm||✔||TNC endorsement||✖||$1,397|
|USAA||✔||rideshare gap coverage endorsement||✖||$1,209|
How much is rideshare insurance?
It’s difficult to determine an average price for rideshare insurance because the cost varies by state and company. Additionally, any car insurance premium is affected by rate factors, such as driving history, geographic location, claims history, the age of your car and more. It also depends on the type of policy you have. A standalone rideshare insurance policy will also likely be more expensive than the additional cost of a rideshare add-on to your existing policy. Consider contacting companies that offer rideshare insurance near you to get a quote to determine your actual rates.
How to buy rideshare insurance
Some car insurance companies 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 find and compare quotes from multiple providers to determine which company can give you the best rate with the coverage that fits your needs.