Are you a Lyft or Uber driver, or plan on becoming one? Here’s what you need to know to make sure you have the required rideshare insurance to protect your car
Ridesharing has exploded in popularity over the past few years. Until recently, insurance options for rideshare drivers have been sparse. Personal insurance often doesn't cover ridesharing, because ridesharing is work. But commercial insurance isn't sensible. It's expensive, and you probably don't want a commercial insurance policy on your personal vehicle.
"Unfortunately, rideshare insurance is still a huge issue for many drivers. And there are legitimate gaps in coverage for many drivers." says Harry Campbell, founder of The Rideshare Guy Blog.
Car insurance companies have begun fulfilling demand by offering coverage options tailored to Uber and Lyft drivers. It's called rideshare insurance or a TNC (transportation network company) endorsement. If you're interested in rideshare insurance, there's a lot you need to know:
First, insurance is required by law. Uber and Lyft require it before you're approved to drive. Both companies provide some forms of insurance, but it's not comprehensive. A rideshare trip is divided into 3 periods, and Uber and Lyft's insurance policies only cover your expenses during periods 2 and 3:
Without rideshare insurance, you're putting your financial well-being at risk. Why? Pretend you're at fault for an accident when you're logged into Uber or Lyft. If you're in period 1, none of your expenses will be covered by Uber and Lyft's insurance policies.
"During [period 1], the driver is working. So the commercial use exclusion on their personal auto policy applies. But they have limited (if any) coverage through the ridesharing company," says Devin Engelmann, office manager at Secord Insurance Agency. "By purchasing auto insurance with a rideshare endorsement, the coverage on the personal auto policy will extend to fill this gap, covering anything that the rideshare company does not."
Uber and Lyft insurance policies WON'T cover your expenses during period 1, when you're waiting for a ride request. They do provide liability coverage for others in case you cause an accident, but that does not protect you. Comprehensive coverage only kicks in during period 2 and ends after period 3, or when you drop the passenger off.
A normal personal car insurance plan will often cover you until you log into the rideshare app and begin period 1. Period 1 is known as a gap. That's because there's a gap in insurance when you aren't picking up or driving a passenger. Your personal insurance and Uber or Lyft comprehensive coverage aren't in effect at this time.
Rideshare insurance is designed to cover you during the gap. Otherwise, you could be out a lot of money if an accident happens during that the gap.
Knowing the ins and outs of rideshare insurance isn't easy. Coverage varies depending on what state you live in and what rideshare period you're driving in.
|Company||Insurance Coverage Limits With a Passenger||Insurance Coverage Limits Without a Passenger (before accepting request)|
|Uber||$1 Million Liability / $1 Million Uninsured/ Underinsured Motorist Injury||$50,000 individual / $100,000 per incident / $25,000 property damage|
|Lyft||$1 Million Liability / $1 Million Uninsured/ Underinsured Motorist Injury||$50,000 individual / $100,000 per incident / $25,000 property damage|
During period 1, Uber and Lyft only offer limited liability coverage. Payouts are limited to $50,000 per person, $100,000 per accident, and $25,000 for property damage.
"Period 1 is when drivers are at the most risk," says Harry, the Rideshare Guy. "If they were to get into an accident during this time, they'd receive no collision coverage from Uber or Lyft."
That's right -- there's no collision or comprehensive coverage in period 1. If you cause an accident during period 1, the other person's expenses are covered up to those amounts. But you'll have to pay for your own medical and vehicle expenses.
During periods 2 and 3, Uber and Lyft provide liability and collision coverage. Uber and Lyft provide $1 million of primary liability coverage while you’re in 'driver mode.' They also offer $1 million of coverage for injuries caused by uninsured or underinsured drivers during that time. Lyft and Uber have respective deductibles of $2,500 and $1,000.
This is an area where rideshare insurance is helpful. It's cheaper than commercial insurance and better suited for ridesharing than personal insurance. Plus, it covers the period 1 gap. This is when you're online for Lyft or Uber but don't have a passenger or ride request.
If you're not familiar with what 'the gap' is, keep reading.
Many car insurance companies now offer rideshare coverage. It's possible to bundle rideshare coverage from your personal auto insurance company at low cost. But, options and prices vary depending on what state you live in and what provider you use.
|Allstate||AZ, CA, CO, DC, GA, HI, IA, ID, IL, IN, KS, KY, MD, ME, MN, MO, NE, NM, NV, OH, OK, SC, TN, TX, UT, WA, WI, WV||$20 / Year|
|Erie||DC, IL, IN, KY, MD, OH, PA, TN, VA, WI, WV||$9-$15 / month|
|Farmers||AL, AR, AZ, CA, CO, FL, GA, IA, ID, IL, IN, KS, MD, MI, MN, MO, MT, ND, NE, NJ, NM, NV, OH, OK, OR, TN, TX, UT, WI||$15 / month|
|GEICO||AL, AZ, AR, CT, CO, DE, DC, GA, ID, IL, IN, IA, KS, LA, ME, MD, MN, MS, MO, NE, NM, ND, OH, OK, OR, PA, RI, SC, SD, TN, TX, VT, VA, WA, WV, WI, WY||$13 / month|
|American Family||AZ, CO, GA, ID, IN, KS, MO, ND, OH, SD, UT, WI||$23 / month|
|Metlife||CA, CO, IL, TX, WA.||Cost Per Mile|
|Mercury||AZ, CA, GA, IL, NV, OK, TX||$ .20 / Day|
|Progressive||MI, PA, TX||Get A Quote|
|State Farm||AL, AZ, CA, CO, CT, DC, DE, FL, GA, IA, ID, IN, KS, KY, LA, ME, MI, MN, MO, MT, MS, ND, NE, NH, NJ, NM, OH, OK, OR, PA, SC, TN, TX, UT, VA, WA, WI, WV.||$20 / Month|
|USAA||AL, AZ, CA, CO, CT, GA, IA, IL, IN, KS, KY, LA, MA, MD, MO, ND, NE, NH, NV, OH, OK, OR, TN, TX, WA, WY||$6 / Month|
|Safeco||AZ, CO, IL, IN, KS, MN, MS, OK, OR, TN, UT, WA, WI||$10 / Month|
|Travelers||CO, IL||Get A Quote|
|MetroMile||Discontinued rideshare insurance coverage|
|Pemco||OR, WA||Get A Quote|
|Cost/Rates: "The rates displayed are estimated costs. Drivers rates can vary based on location, driving record and vehicle"|
Want to find the cheapest rideshare insurance? QuoteWizard can easily help you compare auto insurance quotes from multiple providers.
A: Most states require car owners to have some amount of liability coverage. So, you’ll need at least that if you want to be a “street legal” rideshare driver. You’ll also need collision and comprehensive coverage if you want Lyft’s or Uber’s contingent coverage if your vehicle’s damaged.
A: That's a tough one. Not all states have rideshare insurance options. Some companies refer to rideshare insurance as a TNC (Transportation Network Company) endorsement. Consider switching to another provider that does offer rideshare insurance. If you can't find one, you may have to consider a commercial insurance policy if you want comprehensive coverage.
A: Cross your fingers that you don't get in an accident! If you don't have rideshare coverage and you get in an accident, you might owe a lot of money. It depends on the accident specifics and what part of the rideshare drive you're in.
If you're logged into the app with no passenger or ride request and cause an accident, you'll have a problem. Uber and Lyft's insurance policies won't pay for any of your expenses. If there's a passenger in the car or you're in route to pick one up, you'll have some insurance coverage. It's advised that you look for rideshare insurance if you want comprehensive coverage.
A: This is a common question. You already have your own car insurance, so you're covered during the gap, right? Unfortunately, no. Companies offer personal and commercial car insurance plans, but working for Uber and Lyft falls somewhere in between. You're using your personal vehicle to do commercial business.
For example, you need personal car insurance when you're driving to meet with friends or get groceries. But the second you turn on the Lyft or Uber app, you're using your car for business, not personal reasons. That's why you need rideshare insurance.
A: Uber insurance covers you with a $1 million dollar liability policy:
Uber insurance also includes a $1 million dollar Uninsured/Underinsured Motorist policy. This covers bodily injury to the occupants of the Uber vehicle if it's in an accident with an underinsured driver. Uber's deductible is $1,000.
Between trips Uber also offers insurance for drivers that are looking for riders, but have not yet accepted a trip. This Uber insurance is also liability coverage for bodily injury. The coverage limits are $50,000 per person, $100,000 per accident, plus $25,000 for property damage. Your own expenses will not be covered by Uber if an accident occurs during this time.
A: Lyft provides drivers with a similar baseline insurance as Uber. Drivers who are on the app waiting for a ride request have limited liability coverage.
Liability insurance only covers the other drivers or riders in an accident you caused when waiting for a ride request. Your expenses will be paid for by your own insurance policy or out of pocket.
Lyft offers $1 million liability and $1 million uninsured motorist coverage. This protects you when you're in route to pick up a rider or dropping them off. They also have a comprehensive/collision coverage up to $50,000 with a $2,500 deductible.
A: It’s possible the company will raise your rates or cancel your policy. If that happens, QuoteWizard can connect you with agents from other insurers. That way you can maintain the insurance coverage required to offer rideshare services.
A: A lot of people keep this info to themselves. But it’s not a good idea if you want your claims to be paid. Be aware that your rates may go up, and in some cases drivers have had their coverage cancelled.
A: Allstate, Erie, Farmers, Geico, MetLife, Mercury, Metromile, Progressive, State Farm, Safeco, Travelers, and USAA all offer rideshare friendly policies. However, most of those insurers only sell these policies in certain states. Also, some offer them to Uber drivers but not Lyft ones or vice versa. Check with your local insurance providers to learn about your options.
A: First, the bad news: this kind of policy will likely cost you more than a personal auto policy. The good news is that it may not cost you much more. What you pay depends on a number of factors:
If you're lucky, you can bundle a rideshare policy with your personal car insurance at a fair rate.
A: Yes, they do. Both companies provide contingent liability coverage of $50,000 per person, $100,000 per accident, and $25,000 for property damage. They also provide $1 million of primary liability coverage and $1 million of uninsured and underinsured motorist coverage.
Lyft and Uber offer their drivers contingent comprehensive and collision coverage too. Lyft’s coverage limits payouts to $50,000. It also attaches $2,500 deductibles to each claim. Uber insurance covers “up to the actual cash value of the vehicle.” Uber requires drivers to pay a $1,000 deductible per incident.
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