Q

What is ridesharing insurance?

A

People who drive for Uber, Lyft, GrubHub, DoorDash, or other rideshare/delivery services should have rideshare car insurance. Personal auto insurance doesn’t cover you while you’re using your car for work.

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Rideshare insurance is an add-on to your insurance policy that covers you when you drive your car to make money, whether it’s a full-time job or a part-time side hustle. Drivers may be surprised to learn that their personal car insurance doesn’t provide coverage while they are working. In fact, rideshare drivers who don’t have coverage specifically designed for their needs could find themselves in a bad situation if they’re in a car accident while on the job.

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Whether you’re driving people from one place to another or delivering food to hungry customers, if you are driving your own car you need to have rideshare auto insurance.

Key Takeaways

  • Rideshare insurance covers you when you drive your car to make money, whether it’s a full-time job or a part-time side hustle.

  • If you have a rideshare gig without telling your insurance company about it, they could potentially cancel your coverage for not disclosing your car’s business use.

  • Many rideshare companies like Uber and Lyft offer at least some coverage for you as a driver, but not all of them offer insurance and some only offer partial coverage.

  • Rideshare coverage is much cheaper than commercial coverage, but the cost can vary significantly from company-to-company and state-to-state.

Why delivery, Uber and Lyft drivers need rideshare insurance

Your personal coverage protects you when you are driving your car to get around town, but it doesn’t apply if you are using your car to earn a paycheck. In fact, if you have a rideshare gig without telling your insurance company about it, they could potentially cancel your coverage for not disclosing your car’s business use.

If you drive for a company like Uber or Lyft, they likely offer some amount of coverage that covers you at least some of the time, so check with the company to find out what coverage they may or may not offer. 

Rideshare insurance is designed to cover you when your personal coverage and your rideshare company’s coverage don’t, which is vital if you don’t want to be stuck paying for damages out-of-pocket in an accident.

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How does rideshare insurance work?

Rideshare insurance covers you while you are on the clock, which means it breaks down the time you’re driving into four parts:

Rideshare periodWhat it meansWhich coverage is active?
Period 0You aren’t using your rideshare app. This typically includes going to the grocery store, taking your kids to school, and other things you do while you aren’t working.Your personal auto insurance applies to any accident or other issue that happens during this time.
Period 1Your rideshare app is on, but you haven’t accepted a ride. You’re technically working, but you aren’t on the clock yet.Your rideshare coverage through your employer’s policy will cover liability only at this point, leaving your personal rideshare policy to cover comprehensive and collision claims.
Period 2Your rideshare app is on and you have accepted a ride request, but you haven’t picked up your passenger yet.Your rideshare coverage through your employer's policy is completely active, covering everything up to the policy limits.
Period 3You have a rideshare passenger in the car.Your rideshare coverage through your employer's policy is completely active, covering everything up to the policy limits.

How much does rideshare insurance cost?

Rideshare coverage is much cheaper than commercial coverage, but the cost can vary significantly from company-to-company and state-to-state. Some companies, like USAA,  advertise adding rideshare coverage to your policy for as little as $6 per month, while other companies, like State Farm, charge upwards of 20% of your annual premium.

How to get rideshare insurance

To get rideshare insurance you should reach out to your insurance company and find out if they offer it. If so, they can usually offer you a rideshare endorsement or rider, which means they add the coverage onto your current policy.

If your current insurance company doesn’t offer rideshare coverage, reach out to another company or an insurance agent to get a quote on an auto insurance policy that does offer a rider for rideshare coverage.

Who offers rideshare insurance

There are a number of companies that offer rideshare insurance, including:

CompanyCoverage details
AAAOffers rideshare coverage in some states, other states require commercial insurance
AllstateAllstate Ride for Hire provides deductible gap coverage for damage to your vehicle up to $2,500 in some states
FarmersOffers rideshare coverage in 36 states
Liberty MutualPartners with Uber in some states and Lyft in others to offer rideshare coverage
ProgressiveOffered as an add-on to a standard policy in some states, other states require commercial insurance
State FarmRideshare coverage available for 15% to 20% of your annual premium
USAARideshare coverage available for as little as $6 per month

Insurance companies continually update the types of coverage they offer, so just because you don’t see your insurance company on this list doesn’t mean they don’t offer rideshare insurance. Check with your provider to see what coverage options they have available for you. 

Insurance through your rideshare job

Many rideshare companies offer at least some coverage for you as a driver, but not all of them offer insurance and some only offer partial coverage. For example, GrubHub and Instacart don’t offer any coverage at all, while DoorDash only provides liability coverage. The type of coverage offered and coverage limits will vary from state to state, so you’ll need to check with your rideshare company to find out what coverage they offer.

Car insurance for Uber drivers

Uber has car insurance available for their drivers when they are on the clock. If you are available or waiting for a ride request, their policy offers:

Third-party liability (if your personal auto insurance doesn’t apply):

  • $50,000 in bodily injury per person

  • $100,000 in bodily injury per accident

  • $25,000 in property damage per accident

If you are on your way to pick up riders or have a rider in your car, their policy offers:

  • $1,000,000 third-party liability

  • Uninsured/underinsured motorist bodily injury

  • Contingent comprehensive and collision

  • Up to actual cash value of car with a $2,500 deductible

  • Certain vehicles offered through the Vehicle Marketplace are subject to a $1,000 deductible

Keep in mind that insurance requirements vary by state, so these numbers might be slightly different if your state requires higher levels of coverage or additional coverages not included in the list above. 

It is also important to know that the coverage they offer their rideshare drivers is slightly different than the coverage they provide for their delivery drivers, so check the Uber website carefully to make sure you know exactly what coverage will apply to you.

Car insurance for Lyft drivers

Lyft car insurance is available for their drivers when they are on the clock. If you are available or waiting for a ride request, their policy offers:

  • $50,000/person for bodily injury

  • $100,000/accident for bodily injury

  • $25,000/accident for property damage

If you are on your way to pick up a rider or you have a rider in your car, their policy offers:

  • $1,000,000 for 3rd-party auto liability

  • Uninsured/underinsured motorist bodily injury

  • Contingent comprehensive & collision up to the actual cash value of the car ($2,500 deductible)

If your state requires higher levels of coverage than what Lyft offers, the company will increase their coverage to make sure you meet the state minimum requirements. Comprehensive and collision coverage is only offered if you carry the coverage on your personal policy.

You can always reach out to your insurance agent or representative for help filing a claim.

Frequently Asked Questions

Is rideshare insurance required?

While rideshare insurance isn’t necessarily required by your company (though it might be, depending on your contract) it is a requirement if you are going to be covered for accidents that happen while you are waiting for a passenger.

Is rideshare insurance a commercial insurance?

Rideshare insurance is technically a type of commercial coverage, in that it covers your car while you are using it for business purposes. However, it isn’t sold as a commercial policy. It is sold as a rider for your personal auto insurance, which is treated differently than commercial insurance.

What happens if I can’t find rideshare insurance?

Rideshare insurance isn’t available everywhere. If you can’t get a policy specifically designed for rideshare drivers, you can purchase a commercial insurance policy that will provide the same basic coverage, but it comes with higher liability limits and a bigger price tag than typical rideshare coverage. The type of coverage you need depends on your state, so check with an insurance expert to find out exactly what coverage you need.