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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Everyone knows that you need car insurance, but why do rideshare drivers need special insurance? Isn’t their personal auto insurance enough? Unfortunately, it’s not — 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.
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 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
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. 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.
Your employer likely offers some amount of coverage that covers you at least some of the time, though not every company does, so check with your employer to find out what coverage they may or may not offer. Rideshare insurance is designed to cover you when your personal coverage and your employer’s coverage don’t, which is vital if you don’t want to be stuck paying for damages out-of-pocket in an accident.
While rideshare insurance isn’t available everywhere, there are options for rideshare drivers who don’t have access to the coverage.
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 your insurance agent or representative to find out exactly what protection is important for you.
Compared with a commercial policy, rideshare insurance is the more affordable option because it breaks down into four parts.
|Rideshare period||Which coverage is active?|
|Period 0: You 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 1: Your 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 2: Your 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 3: You 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.|
Sometimes your personal insurance policy applies, sometimes your rideshare coverage works together with your employer’s policy to pay for claims, and other times your employer’s coverage pays for 100% of damages, up to the limits of their policy. If your employer doesn't offer any coverage, your rideshare policy will cover any damages caused in an accident, up to the limits of your policy. Because the insurance policies are all working together to share the risk, a rideshare policy is usually cheaper than commercial insurance coverage.
Your first step should be to reach out to your insurance company and find out if they offer rideshare insurance. 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.
There are a number of companies that offer rideshare insurance, including:
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.
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. You can’t assume that your employer is covering you while you are on the road, so it is important to have them send you a copy of their policy in writing. Once you have a copy of their auto insurance coverage, you can take that to your insurance representative and they can help you get the supplemental coverage you need.
Keep in mind that each rideshare company offers different insurance benefits. 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 employer to find out what coverage they offer.
If you are in an accident while driving for a rideshare app, there are several steps you need to take.
Make sure everyone involved is safe
Exchange insurance information with the other driver
Call the police to file a report
Once that is done, your next step is to determine which period you are in so you know exactly which insurance policy is responsible for paying the claim. Make sure that the police report correctly reflects the situation—if they list the wrong street or the wrong time of day on your report, that could cause serious confusion for the insurance companies trying to figure out who is responsible for payment.
You can always reach out to your insurance agent or representative for help filing a claim.
Rideshare coverage is much cheaper than commercial coverage, but the cost can vary significantly from company-to-company and state-to-state. Some policies advertise adding rideshare coverage to your policy for as little as $6 per month, while other companies charge upwards of 20% of your annual premium.
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. Your personal auto coverage won’t pay for claims that happen while you are on the clock, which means you need to have supplemental coverage to protect yourself financially. More than that, your insurance company can (and likely will) cancel your car insurance completely if they find out you are working as a rideshare driver without the proper coverage.
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.
In a best case scenario, your auto insurance company will find out you are working as a rideshare driver without proper coverage and cancel your insurance policy, forcing you to find other coverage. In a worst case scenario, you’d get in an accident and your insurance company not only cancels your coverage, but they also refuse to pay the claim. You may also be contractually required by your employer to carry rideshare coverage, which means you could be out of a job as well as being forced to pay for a claim out-of-pocket.
Given the seriousness of the situation, it is important to have proper rideshare insurance if you are driving your car for work.
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