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Auto Insurance Requirements for Rideshare Drivers: Uber, Lyft, and More

If you’re driving for Uber or Lyft, having rideshare insurance can be a lifesaver if you’re in a car accident. While these companies offer some coverage, it might not be enough, leaving you with hefty bills for car repairs and medical expenses.

What is Rideshare Driving?

To understand rideshare insurance, you need to know the three phases while the rideshare app is on:

1. Available: You’re ready to pick up a passenger.

2. En route: You’ve accepted a ride and are on your way to pick up the passenger.

3. On the trip: You’ve picked up the passenger and are headed to their destination.

During these phases, your personal auto insurance applies when the app is off, but once it’s on, Uber and Lyft offer some coverage. Knowing the gaps in this coverage is crucial to ensure you’re adequately protected.

What Uber and Lyft Cover?

Here’s a breakdown of what’s covered by Uber and Lyft during each driving period:

  • Available: Third-party liability coverage if your personal auto insurance doesn’t apply, covering bodily injury and property damage.
  • En route: $1 million third-party liability coverage, uninsured/underinsured motorist bodily injury coverage, and contingent comprehensive and collision coverage.
  • On the trip: Similar coverage to the en route phase, with $1 million liability coverage and comprehensive and collision coverage.

Breaking Down Coverage Terms

Here are some key terms related to insurance for rideshare drivers:

  • Third-party liability coverage: Pays for injuries and damages caused to someone else in an accident.
  • Uninsured/underinsured motorist bodily injury coverage: Covers injuries if another driver is at fault and doesn’t have sufficient insurance.
  • Contingent collision and comprehensive coverage: Provides coverage if you have collision and comprehensive coverage on your personal auto insurance policy.

Does Your Personal Insurance Cover Rideshare Driving?

Your personal auto insurance typically won’t cover rideshare trips because it assumes you’re not earning money from driving extensively. However, many insurers now offer rideshare insurance to fill this gap.

Minding the Gap

While rideshare companies provide some coverage, there can still be gaps, especially if you only have minimum personal auto insurance. Rideshare insurance helps bridge these gaps, offering additional protection during various driving phases.

Insurance Companies Offering Rideshare Coverage

Several insurance companies offer rideshare insurance, with policies varying by state. Some examples include:

  • Allstate
  • American Family
  • Farmers
  • Mercury
  • Progressive
  • State Farm
  • Travelers
  • USAA

Cost of Rideshare Insurance

The cost of rideshare insurance varies among companies. For instance, State Farm’s rideshare insurance typically adds 15% to 20% to the premium, while USAA’s add-on can be as low as $6 per month.

What Happens If You Don’t Disclose Your Driving Gig?

Failing to inform your insurance company that you’re a rideshare driver could have serious consequences. Your insurer might reject claims or even drop you as a customer if you’re involved in an accident while driving for rideshare without the proper coverage.

Conclusion

Rideshare insurance is needed for Uber and Lyft drivers to ensure they’re adequately protected while on the road.

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