Rideshare insurance in Texas

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Getting started as a driver for Lyft or Uber is generally simple enough. If you have a fairly new four-door vehicle and a driver’s license in good standing, you are nearly ready to go. What most people do not realize is that your car insurance may not cover you if you cause an accident while you are working. If you’re wondering, “Do I need special insurance for Uber or Lyft,” the answer is probably yes. You will likely need rideshare car insurance in Texas to have enough coverage every time you are in your vehicle. The good news is, rideshare insurance Texas coverage may be included through the company you drive for, and it is generally inexpensive to add to your existing coverage.

How insurance works for rideshare drivers

Rideshare insurance works with your personal car policy to cover you when you are working for a Transportation Network Company (TNC), such as Lyft and Uber. The way to know when you are considered at work is simple — your rideshare app is on. There are four periods you should know about to better understand what part of your car insurance coverage is at work for you:

  • Period 0: Known as offline, the rideshare app is off, and you are covered by your personal vehicle insurance policy.
  • Period 1: Labeled as available, you are logged in and waiting for a rideshare request. Once the app is “on”, rideshare insurance is at work, although it is limited to liability insurance in period 1.
  • Period 2: During period 2, you have matched or accepted a ride and are making your way to pick up the passenger. Rideshare insurance Texas is in full force for period 2 and period 3.
  • Period 3: In this period, you have picked up the passenger(s). You are covered in full as long as the passengers are in your vehicle.

Uber and Lyft insure their drivers to a certain extent, although you may want more coverage than what they have to offer.

Texas rideshare insurance requirements

Rideshare insurance minimums are often based on the state’s insurance requirements. However, Texas mandates rideshare drivers to carry more than the minimum amount of coverage. The state’s liability insurance minimums for personal drivers are:

  • $30,000 for death and/or injury per person per accident
  • $60,000 for death and/or injury to all parties per accident
  • $25,000 for damage to property per accident

As for rideshare insurance, Texas requires drivers to have a minimum of:

  • $50,000 for death and/or injury per person per accident
  • $100,000 for death and/or injury to all parties per accident
  • $25,000 for damage to property per accident during period 1
  • $1 million during period 2 and 3

Uber and Lyft coverages comply with the minimums required by Texas. The only difference is the deductible amount — Uber’s deductible is $1,000 and Lyft’s is $2,500. However, their coverage may not be enough for your personal needs or you may be able to get a lower deductible through your personal insurance carrier. A rideshare add-on through your current insurance company may be worth the small increase in premiums.

Requirements for rideshare drivers in Texas

Lyft car requirements and Uber driver requirements Texas are similar. To be able to make money as a driver with either of the two rideshare services, you will need:

  • To download the app onto your smartphone and have a reliable internet connection to use the app on the go
  • To be at least 23 years old to drive for Uber and 25 or older for Lyft
  • To have one year of driving experience with both companies, or three years experience to drive with Uber if you’re 23
  • To have a valid Texas driver’s license. You may drive for Lyft with an out-of-state license if you’re active duty military or a dependent.
  • To pass the company’s screening that includes a driving history and criminal background check
  • A four-door vehicle newer than 15 years for Uber, or a vehicle from 2001 or newer for Lyft
  • An approved vehicle model according to Lyft or Uber
  • A Texas license plate on your car
  • Proof of vehicle insurance
  • Proof of a passing vehicle inspection

Texas rideshare insurance companies

Not all car insurance carriers provide rideshare insurance in Texas. Some of the best car insurance companies in Texas that offer a rideshare insurance add-on are:

  • Erie: Adding a “business use” designation to your Erie auto insurance policy in Texas adds rideshare coverage for a small fee.
  • Progressive: The insurance carrier typically offers cheap vehicle coverage and provides the option of rideshare coverage.
  • USAA: USAA provides membership to military personnel and family, who can add rideshare coverage for as little as $6 per month.
  • State Farm: State Farm will bridge the gap between TNC coverage and your personal policy, charging you the lower deductible of the two.
  • Allstate: The carrier’s Ride For Hire coverage goes into full force for period 2 and 3. Unlike other insurance companies, your personal coverage is in effect during period 1.

What to do if you have an accident driving for a rideshare in Texas

If you’re involved in an accident, report the incident to your rideshare company. and call the police to file a report. The rideshare app will provide details of which period you were in when the accident occured, for insurance purposes. It is helpful to collect information for the parties involved, such as:

  • Names and phone numbers
  • Driver’s license details
  • Vehicle registration numbers
  • License plate number
  • Their insurance information

FAQ

Do you have to have extra insurance if you drive for a rideshare in Texas?

Although Lyft and Uber provide a certain level of rideshare insurance while you are driving, the amount may not be enough for your comfort. Getting additional rideshare coverage has three advantages — inexpensive premiums, the option of a lower deductible and higher coverage limits.

What insurance will cover you if you get in an accident while driving for a rideshare?

Rideshare insurance provides the gap between your personal insurance and a commercial car policy. If your app is on and you are waiting on a ride request, in the process of picking passengers up or have riders in your vehicle, rideshare insurance will provide coverage.

What providers offer rideshare insurance in Texas?

Not all carriers offer rideshare coverage as an add-on. State Farm, USAA, Progressive, Allstate and Erie are some of the top providers of rideshare coverage in Texas. Although rideshare insurance Texas premiums are inexpensive, it may still be worth shopping around for car insurance to get the best rate.

Written by
Cynthia Paez Bowman
Personal Finance Contributor
Cynthia Paez Bowman is a finance and business journalist who has been featured in Bankrate, Business Jet Traveler, MSN, CheatSheet.com, Freshome.com and TheSimpleDollar.com. She regularly travels to Africa and the Middle East to consult with women’s NGOs about small business development and works with select startups and women-owned businesses to provide growth and visibility.