Every type of insurance Uber drivers need

Colin Lalley 1600


Colin Lalley

Colin Lalley

Insurance Expert

Colin Lalley is the Associate Director of SEO Content at Policygenius in New York City. His writing on insurance and personal finance has appeared on Betterment, Inc, Credit Sesame, and the Council for Disability Awareness.

Published May 30, 2017|7 min read

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Uber drivers have the benefit of setting their own hours, driving around their cities, and getting to meet a lot of interesting people. Unfortunately, they face the same challenge that all freelancers do: a lack of insurance benefits.

When it comes to insurance, Uber drivers are on their own. Uber doesn’t consider drivers employees, so things like life insurance and health insurance aren’t provided, and even auto insurance for Uber drivers has some strange grey coverage areas.

But Uber drivers don’t have to navigate the world of insurance alone. Here are five types of insurance that every Uber driver needs to have, that they can’t rely on their employer for.

Life insurance for Uber drivers

Do you have dependents? Does your family count on your income to pay for everyday expenses, as well as long-term financial plans like retirement? Is anyone cosigned on any debt you have, like student loans or an auto loan for a car you bought for a certain rideshare company?

Then get life insurance.

That’s pretty much the long and short of it. If there are people who rely on you for their financial needs, life insurance is a good idea. This is especially true for Uber drivers; because you’re a contractor, you don’t get perks that salaried workers might, like 401(k) matching or student loan assistance. You’re on the hook for all of your debts and plans, and life insurance can help your loved ones avoid missing out on college, retirement, and more.

Another reason life insurance is so crucial for Uber drivers? Needless to say, you’re on the road a lot. The reason why car insurance companies take miles driven into account when setting rates is because the more you drive, the more at risk you are to be in an accident. The IIHS reports that in 2015 there were over 25,000 auto accident-related deaths in the United States. With that increased risk, it’s more important than ever to make sure you have life insurance.

Plus, the sooner you apply for life insurance, the cheaper it is, because premiums increase with age. Get covered today and you’ll be able to keep more of your fares in your pocket.

Uber drivers: Shop for life insurance today

Health insurance for Uber drivers

A lot of people have health insurance through their employer. Since drivers are contractors there won't be an Uber health insurance any time soon, but under Obamacare it's still legally required. You should go ahead and buy health insurance not just to save yourself a $695 tax penalty, but because it provides a safety net for you and your family and protects against high medical bills – the number one cause of personal bankruptcies.

That’s important because Uber drivers may be at higher risk of sickness and physical ailments. It’s not just the driving that does it, although you’re certainly more prone to auto accidents. No, it’s the extended periods of sitting.

Sitting for too long can result in a number of health hazards, including heart disease, overproductive pancreas, increased risk of colon, breast, and endometrial cancer, poor circulation, soft bones, and herniated lumbar disks. The Mayo Clinic notes that much of this damage can’t be reversed by exercise, either.

And Uber drivers sit for a long time. In fact, Uber has designed its app to play mind games with you and keep you driving – and therefore sitting – for as long as possible. It got to the point where changes had to be made to the app because drivers weren’t stopping for breaks, even to eat or use the restroom.

Health insurance covers extreme medical expenses but also helps with preventative care so these issues don’t get exacerbated. And there are plenty of ways to make health insurance more affordable; you can see if you qualify for subsidies to help pay for it, or contribute to a health savings account to contribute pre-tax dollars for qualified medical expenses.

A legal requirement shouldn’t be the only reason you buy health insurance; your family’s – and your own – well-being is important, and health insurance makes sure you can take care of everyone.

Uber drivers: Shop for health insurance today

Auto insurance for Uber drivers

Car insurance seems like a no-brainer for Uber drivers. You drive, so you have car insurance, right? Plus, isn’t it legally required?

Yes and yes. But there are few caveats when it comes to auto insurance for Uber drivers.

You need a personal car insurance policy for when you’re going about your normal life. However, you also need coverage for when you’re driving. Uber offers some level of insurance, but Uber car insurance is often low during the "uber insurance gap" between when you have the app on but haven’t found a fare yet, and when you have a passenger in the car. It’s described as "back-up coverage when/if driver’s personal auto insurance declines claim."

Enter rideshare insurance.

Rideshare insurance is sold to cover that gap as an add-on to your personal car insurance policy, or as a modified commercial policy (meaning that it’s okay for you to be using your car specifically for business purposes).

Many companies are offering rideshare insurance now, although which drivers are covered, in which states, and for how much each month varies. Check out our complete list to learn which car insurance companies are offering rideshare insurance near you and how to buy.

Uber drivers: Shop for rideshare insurance today

Long-term disability insurance for Uber drivers

Let’s look at a scenario: You’re an Uber driver, happily making ends meet by taking fares all week. But then one day you find out you have cancer. It’s treatable, but you’ll have to go through some chemotherapy treatments. That means fewer hours on the road and, because you only earn money on fares and don’t get any sick leave, it means you’re not getting paid as much.

Long-term disability insurance is like insurance for your income. When you can’t work, disability insurance keeps money coming in. If you think you don’t need it, think again – most disabilities come from something like illness rather than being hurt on the job, and that can happen to anyone.

In conjunction with an emergency fund, long-term disability will help you make ends meet until you can return to work. Even if you can only work part time, disability insurance can help fill in the income gaps. That means if you can only drive 80% of your normal hours, you can supplement it with your insurance.

Most disability claims last for three years, meaning that a five-year policy should cover most people, and that’s important because you can lower your long-term disability insurance premiums by not over-insuring yourself. You can also adjust the benefit period (how long benefits are paid) or the elimination period (how long after you become disabled until benefits are paid) to make your policy affordable.

Uber drivers: Shop for long-term disability insurance today

Need coverage for before you long-term disability insurance kicks in? A short-term policy provides protection during your long-term policy's elimination period. Visit Policygenius partner LifePreserve for more information.

Personal injury insurance for Uber drivers

Personal injury insurance is required as part of your auto insurance in some states, but not in all. It can protect against medical expenses, income loss, and other costs as a result of an accident. If you don’t have your own personal injury insurance, Uber recently offered an option, albeit currently limited to drivers in a small number of states.

Uber is raising rates by a few cents for riders in Arizona, Delaware, Illinois, Massachusetts, Oklahoma, Pennsylvania, South Carolina and West Virginia; drivers can choose to keep the extra fare or put it toward the personal injury policy being offered by either Aon or OneBeacon.

Because Uber drivers don’t qualify for workers’ comp, this is a good way for drivers to protect themselves if they get hurt on the job (coverage only applies when drivers are logged into the Uber app). Some people think it’s a PR move for Uber to help hide some of its more public failings, and it doesn’t necessarily take the place of a good disability or health insurance policy, but it can be valuable nonetheless. Plus, even if you decide not to buy the insurance, you’re getting at least a small raise. We’ll have to wait to see if Uber rolls out the program nationwide.

Getting the right types of insurance doesn’t have to be complicated. Insurance is a must-have for Uber drivers because of the nature of their work – on the move constantly and paid by the rider – and the fact that they’re on the hook for their own insurance makes it even important to know exactly what you need.

Insurance Expert

Colin Lalley

Insurance Expert

Colin Lalley is the Associate Director of SEO Content at Policygenius in New York City. His writing on insurance and personal finance has appeared on Betterment, Inc, Credit Sesame, and the Council for Disability Awareness.