As a driver, you already know that you need auto insurance to safely and legally operate on the road. Unfortunately, you might not know that your personal auto insurance policy might not protect you while driving for a company like Uber or Lyft. Our guide will help you understand rideshare insurance and how it can help keep you protected while you work.
What is Rideshare Insurance?
Ridesharing insurance is a coverage that you purchase from the company that provides your personal auto insurance policy. Because you’re letting your insurance provider know that you’ll be using your vehicle for work-related purposes, the insurance company can adjust your policy to accommodate you while you provide rides and wait for requests.
Compare Rideshare Insurance Quotes
Rideshare insurance is typically a car insurance extension that you add onto your personal auto insurance coverage. Your ridesharing insurance fills in the gaps left by these ridesharing companies to extend your personal collision, comprehensive and other coverages to instances when you’re using the app and your personal auto insurance policy doesn’t apply.
Working for a rideshare company is considered a commercial use of your vehicle. This means that your personal policy might not protect you while you’re waiting for riders or when you’re transporting guests to their location.
Though Uber and Lyft may provide you with limited liability insurance while you’re using the app or waiting for passengers, this coverage won’t extend to damage to yourself or your vehicle.
Ridesharing insurance extends the coverages and deductibles found on your personal auto insurance policy to instances when you’re working for a company like Uber or Lyft.
Now that you know the answer, are you ready to find your policy? Check out the providers below to see what type of coverage they can offer you and compare quotes.
- Best For:AARP members at least 50 years oldRating:
Rideshare Insurance Provider Reviews
Best Policy Extension: State Farm
If you aren’t interested in buying an entirely new car insurance policy, you might want to consider a policy extension.
Policy extensions or endorsements fill in gaps between your personal car insurance policy and the policies you get from your ridesharing company.
State Farm offers add-on extensions for Uber or Lyft drivers with no mileage limits. You also won’t need to pay extra if you drive for a food delivery app (like Uber Eats) as well as a ridesharing app.
This provides you with an affordable way to further protect yourself while using a ridesharing app.
Best for Wide Availability: Allstate
Ridesharing insurance isn’t available in every state.
However, Allstate extends its policies to most parts of the country.
Though you’ll already need to be an Allstate customer in order to add the company’s “Ride For Hire” coverage to your policy, this can be an excellent option for those who live in areas with limited ridesharing insurance availability.
Best for Members of the Armed Forces: USAA
In addition to homeowner’s insurance and car insurance policies, USAA also offers discounted ridesharing insurance coverage to members of the armed forces, veterans and their families.
USAA is known for providing exceptionally affordable car insurance options as well as guaranteed repairs at more than 2,900 USAA-approved locations.
If you’ve served in the military, USAA can offer a cost-effective way to further protect your ridesharing activities.
How Does Rideshare Insurance Work?
Uber and Lyft are both classified as Transportation Network Companies (TNCs), and they provide limited liability protections to drivers. TNCs provide you with varying insurance coverage depending on what “period” you’re in. The periods these companies use and the protections you’ll gain through your ridesharing company are as follows.
- Your app is off: When you aren’t signed into your ridesharing app and waiting for work or transporting a passenger, your ridesharing company will provide you with no protection. Your personal auto insurance policy will be responsible for handling all claims made when you aren’t working.
- Your app is on and you are waiting for a ride request: While waiting for a ride request, your TNC will provide you with $50,000 worth of bodily injury liability coverage per persona, $100,000 worth of bodily injury liability coverage per accident and $25,000 of liability coverage for property damage. These protections only apply if your personal auto insurance policy doesn’t cover you during this period. Note that during this period, you have no collision insurance or insurance for damage to your own vehicle or health.
- You are picking up or transporting passengers: While fulfilling a ride request, your TNC will provide you with $1 million in third-party liability coverage, uninsured and underinsured motorist coverage (depending on your state’s requirements) and contingent collision and comprehensive coverage. Both Lyft and Uber implement a $2,500 deductible on collision and comprehensive coverage and insure you up to the cash value of your vehicle.
As you can see, there are multiple areas where you might be left without coverage should you only rely on your personal auto insurance policy.
If you have collision or comprehensive coverage on your personal auto insurance policy, it won’t apply when you’re using your app for work. This can leave you completely unprotected while waiting for a ride request.
Types of Rideshare Insurance
There are multiple types of ridesharing insurance policies, and the options that you’ll have available to you may vary depending on the insurance company that you’re working with and the state that you live in. Let’s take a look at a few of the most common coverage options you’ll find.
Hybrid Insurance Policies
The simplest way to get rideshare insurance is to purchase a hybrid insurance policy. Hybrid insurance policies cover you with the same list of protections no matter if you’re driving your vehicle on your own time or for work. These policies also come with a single monthly premium, which makes covering all of your expenses easier to understand.
Ridesharing Extensions or Endorsements
Ridesharing endorsements or extensions are add-on options intended to fill in the gaps left by Uber and Lyft’s coverage while using the app.
Unlike hybrid insurance policies, these extensions don’t replace your personal auto insurance coverage — they only add protections based on the specific limitations of each app’s insurance provisions.
Though ridesharing extensions don’t offer the same all-in-one coverage that you’ll find through a hybrid insurance policy, they’re usually the most affordable way to protect yourself when you’re driving for a TNC.
Commercial Auto Insurance
Ridesharing insurance isn’t available in every state. If you live in a state where you cannot purchase a hybrid insurance policy or a policy extension, you might need to invest in a commercial auto insurance policy.
Commercial auto insurance policies are more expensive than coverage specifically for drivers using a ridesharing app, they can help you handle a wide range of accidents and incidents where you might need to file a claim.
Without a commercial auto insurance policy, you will be financially responsible for any damage to your vehicle that isn’t covered by your TNC’s policies.
Average Cost of Rideshare Insurance
Adding ridesharing insurance to your list of coverages is usually not very expensive. You can expect to pay a few additional dollars each month to extend your coverage to your ridesharing activities.
Major insurance provider State Farm claims that drivers can expect to pay about 15% to 20% more for their auto insurance to extend coverage to ridesharing activities. This means that if you pay $100 a month for your car insurance, you can usually expect to pay between $115 and $120 per month with the addition of ridesharing coverage.
Find Ridesharing Insurance
If you plan on driving for Uber, Lyft or another ridesharing service, it’s in your best interest to protect yourself with a ridesharing insurance policy. If you drive without a policy extension, you should expect to be held liable for any damage to your vehicle that occurs while you’re working.
Taking a few hours to compare endorsements and hybrid insurance policies can potentially save you thousands of dollars if you find yourself involved in an accident while working.
Frequently Asked Questions
Do you need rideshare insurance?
If you drive for a ridesharing company, you should add some type of ridesharing insurance to your policy. Though there is no law that says you must have ridesharing insurance, this protection can help save you from thousands of dollars worth of collision bills if you’re involved in an accident while working.
Do I have to tell my insurance company I drive for an app like Uber or Lyft?
Yes. If you fail to disclose this information, your personal auto insurance provider can deny you coverage for any claims made while you are using your ridesharing app for work.