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- Rideshare insurance can provide additional financial protection for rideshare drivers to close the gap left by the coverage offered by companies like Uber or Lyft.
- 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.
Driving for rideshare companies like Lyft and Uber has become a popular option for people to generate additional income. While you might think of it as just a side gig, using your car for this purpose actually requires an additional type of insurance coverage to ensure you are fully financially protected while driving. Your personal car insurance policy and even an employer-provided commercial insurance plan will not necessarily protect you if you are involved in an accident while driving for a rideshare service. For that type of coverage, you may need rideshare insurance. This may require an endorsement on your existing car insurance or additional coverage from a private insurance company. Bankrate’s insurance editorial team helps you understand what your policy may cover and what you may want to consider to ensure you are financially protected in case of an accident.
What is rideshare insurance?
Car insurance is legally required in most states and is an important financial tool that could help protect you from paying in full for expensive damage if you cause an accident. However, your personal car insurance policy does not cover transporting people from place to place in exchange for money and an accident that occurs while you are driving for business purposes may not be covered. Drivers who decide to pick up work through ridesharing services like Uber and Lyft may believe they are protected by the limited commercial car insurance policy extended by the rideshare company, but these policies usually leave some key coverage gaps and typically offer low coverage amounts that may not be sufficient if you get into an accident.
Rideshare insurance extends coverage beyond what those limited plans offer, filling in the gaps and providing additional protection in case of an accident while driving for a ridesharing service. While rideshare insurance is not legally required in most states, it could save drivers a significant amount of money if they get into an accident while acting as a rideshare driver. If you have an existing car insurance policy, you can often get an endorsement for rideshare insurance that extends your personal insurance coverage to also cover you while you are driving for a ridesharing app. This includes whether you have a passenger in your car, are driving to pick up a passenger, or if you simply have the app on and are waiting for a potential customer.
Why Uber and Lyft drivers need rideshare insurance
Rideshare insurance can provide extra peace of mind and protection to drivers who are making income on ridesharing apps. It also offers coverage when you are working beyond just when you have a rider in your vehicle — protection that you may not be afforded if you rely solely on your personal policy and the commercial insurance provided by the ridesharing company.
While plans may vary, most employer-provided insurance policies do not cover a rideshare driver throughout the entirety of their trip. Typically, these commercial insurance policies only cover you while you are picking up or dropping off a customer. Rideshare workers know that at least some of their time will be spent waiting for a job to be available or moving from location to location to be available for potential rides in their area. Ridesharing services 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. Since you’re technically on the job during this time, your personal insurance is also unlikely to cover you. 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: You are typically 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.
|Car insurance provided by rideshare company||Personal auto insurance policy||Rideshare insurance purchased by rideshare driver|
|Only applies to specific times during the rideshare||Only applies when rideshare driver is not using the car for any work-related purpose; does not cover drivers logged into rideshare app waiting for a request||Covers the periods not covered by personal car insurance or employer-provided car insurance, including waiting for request period|
|Company dictates coverage level||You pay for the amount of coverage you need||You pay for the amount of coverage you need|
The top rideshare insurance companies
Because ridesharing has become such a popular option for gig-based work, with nearly two million rideshare drivers on the road across the country, most major insurance companies offer either a rideshare endorsement or standalone rideshare insurance policy to cover drivers while they work. If you live in a state where rideshare insurance coverage is unavailable, you may want to consider purchasing your own commercial insurance policy to keep yourself financially protected.
Below, Bankrate’s insurance experts reviewed our picks for the top car insurance carriers for rideshare coverage. While we do not have average premium data 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. Keep in mind that cost will vary as insurance costs are dictated by many factors, including location and details specific to each driver such as driving history and vehicle make and model.
|Insurance company||Offers rideshare endorsement||Type of endorsement offered (if offered)||Offers standalone policy||Avg. annual cost for personal full coverage policy|
|Allstate||✔||Ride for hire endorsement||✖||$2,630|
|State Farm||✔||TNC endorsement||✖||$1,480|
|USAA||✔||rideshare gap coverage endorsement||✖||$1,361|
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 generally a good idea to request and compare quotes from multiple providers for the same coverage types and levels to determine which company can give you the best rate for your needs.
Frequently asked questions
If you are driving for Uber, Lyft or another rideshare service, you should inform your car insurance company. This will help you understand how your car insurance works and what steps you may need to take to stay covered as a rideshare driver. If you cause an accident while waiting for an assigned passenger, you may have no coverage through your personal auto policy and be faced with paying for your vehicle repairs and any liability costs on your own.
If rideshare coverage as an endorsement to your personal car insurance policy isn’t available in your state, you may be able to obtain a commercial auto insurance policy instead. Check with your insurance agent or provider to understand what options are available to you.
Even with 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, offering you some financial protection while you’re working even when you aren’t transporting a customer.
When it comes to car insurance, contract delivery drivers are often similar to rideshare drivers. If you deliver for a service like Uber Eats or GrubHub, you are only covered by your personal car insurance policy during certain times. For instance, you might be covered while driving to a restaurant to pick up an order but not covered while logged into the app and waiting to accept an order. Because of that, purchasing rideshare insurance as a delivery driver could be important to protect yourself financially. Speak with an insurance agent at your preferred company to determine whether you need rideshare insurance coverage if you are a delivery driver.
Typically, you can deduct the cost of rideshare insurance from your taxes as it is an expense that you have to incur in order to operate your car for business purposes. Gas, oil change, car maintenance and other related expenses are typically considered tax-deductible, as well. Speak with your accountant to determine whether (and what expenses) you can legally deduct.
Bankrate utilizes Quadrant Information Services to analyze 2023 rates for ZIP codes and carriers in all 50 states and Washington, D.C. Rates are weighted based on the population density in each geographic region. Quoted rates are based on a 40-year-old male and female driver with a clean driving record, good credit and the following full coverage limits:
- $100,000 bodily injury liability per person
- $300,000 bodily injury liability per accident
- $50,000 property damage liability per accident
- $100,000 uninsured motorist bodily injury per person
- $300,000 uninsured motorist bodily injury per accident
- $500 collision deductible
- $500 comprehensive deductible
To determine minimum coverage limits, Bankrate used minimum coverage that meets each state’s requirements. Our base profile drivers own a 2021 Toyota Camry, commute five days a week and drive 12,000 miles annually.
These are sample rates and should only be used for comparative purposes.