Top Insurance Options for Rideshare Drivers 2019

Posted on Posted in Lyft, Uber

Top Insurance Options for Rideshare Drivers 2019

Are you an active rideshare driver or are you considering becoming one?

Driving for Uber or Lyft can provide a substantial amount of freedom and additional cash, which is a big reason why so many new drivers have been joining these platforms as of late.

There's one thing many new drivers often don’t consider, and that is getting the proper coverage, which is vital in protecting both their self and their car.

Unfortunately, regular auto insurance will not cover a rideshare gig, since it’s technically considered a form of work. And commercial insurance is, in our opinion, a bit on the pricey side, so getting one of these policies on a personal vehicle probably isn't the best option either.

So, how does insurance for rideshare drivers work?

First and foremost, it doesn’t matter that you're driving your personal car – getting rideshare insurance is crucial.

What is Rideshare Insurance?

Auto insurance for rideshare drivers covers you if you work for any rideshare company.

There are many companies that offer this insurance option, which you can often pair with your personal auto insurance at a reasonable discount. We believe this is the best route to go if you drive a rideshare gig part-time and need personal auto insurance as well.

Do I still need to inform my insurance provider if I drive for rideshare?

Well, it’s not the best idea to keep your rideshare gig a secret, especially if you want any claims to be paid. Keep in mind that your rates will likely go up if you decide to inform your insurance company - and be prepared to potentially have your auto coverage cancelled.

Why You Need Rideshare Insurance As a Driver

The insurance policy that Uber has in place has been a bit of sticky ordeal for drivers since the company was created. If you fail to get the proper insurance, this can potentially be a costly mistake when worst-case scenarios occur.

Every single driver on the road, rideshare and personal, is taking a risk, and this risk intensifies for rideshare drivers because:

  • They’re using their personal car commercially
  • Since they are on the road for long periods of time, they are likely to become fatigued
  • They’re liable for their passengers, which includes any medical expenses if an accident occurs

If an accident occurs while rideshare driving, this can potentially leave you with colossal medical bills and vehicle damage expenses - not only for you and your passengers but for any parties that are involved in the accident, too.

When you drive your personal car for Uber or Lyft, you greatly increase your risk of a commercial lawsuit, which is why rideshare insurance is so important: so you can majorly safeguard yourself in your own personal financial department.

Where To Purchase Rideshare Insurance

A few years ago, companies that insured personal drivers didn’t offer much assistance if an accident happened during a rideshare ride. In fact, most drivers’ policies were cancelled once they revealed they worked for a rideshare company.

Since then, the popularity of ridesharing has really started to blossom, which, in turn, has created new opportunities for cooperation between personal and rideshare insurance policies.

Where to purchase rideshare insurance

There are now many rideshare insurance companies you can choose from, including:

Not sure where to start in choosing one? Click here to start comparing insurance quotes!

The Cost of Rideshare Insurance

Before Uber and Lyft became popular, personal auto insurance companies charged a hefty premium on top of an existing policy. Now, there are many rideshare insurance companies competing, which makes it a much more affordable expense.

The added monthly cost ranges in price, from less than a cup of coffee to about $25 dollars, all dependent on your circumstances, of course.

What you pay per month for rideshare insurance mainly depends on the following factors:

  • Your age
  • Your location
  • Make and model of your car
  • Past driving record
  • Company you are insured with

Most auto companies can create a special insurance bundle rate for you as a rideshare driver with your personal and rideshare insurances paired together.

How Rideshare Insurance Works in An Accident

When you drive your personal vehicle for personal use only, your personal insurance will cover any misfortunes. However, if you get into an accident in your personal car while rideshare driving, your insurance company can classify your car as a commercial vehicle, which leaves you at risk for not being covered at all.

This is what we like to call the “gray area” when it comes to auto insurance.

So, what’s the difference between rideshare and commercial insurance?

Even when you’re driving for Uber or Lyft you still need a personal policy. Below we'll go a little more in depth about how rideshare insurance works, to help you get a better understanding.

In the event of an accident, Uber has different “periods” which can help decide the coverage you will be granted:

Period One is when you’re logged into the Uber app and waiting to get a request from a passenger. Most personal insurance policies won’t cover you when you have a rideshare app turned on, which is when rideshare insurance comes to the rescue!

Period Two starts whenever you get a ride request and are traveling to pick up a passenger. This is where rideshare insurance will offer an increase in coverage in case something happens.

Period Three starts once the passenger is sitting in your car. This is when your rideshare insurance policy covers you 100%.

You’re probably wondering what happens during Period One when neither personal coverage or rideshare insurance will cover you. This is where many drivers get confused and is better known as a “coverage gap.”

Coverage Gaps

Uber and Lyft policies will not cover you during Period One as you wait for a ride request. However, they do provide you with liability coverage in case you’re in an accident, but that doesn’t fully protect you.

Rideshare Coverage Gap

Credit: USAA.com

The comprehensive coverage kicks in only when you reach Period Two and ends once your passenger reaches their destination.

Your personal car insurance will cover you until you log onto your rideshare app. Period One is a gap - which means your personal policy is no longer in effect during this time.

Period One is where rideshare insurance can really come in handy in case you’re involved in an accident when your rideshare app is on but you don’t yet have a request.

Reporting An Accident and Filing A Claim

Accidents are inevitable. While they can be very stressful, it’s crucial you follow a certain procedure when reporting an accident arises.

  1. First, ensure everyone is safe and call 911 before getting in touch with Uber. The last thing you want to do is cause other accidents if law enforcement or emergency services aren't there to direct traffic.
  2. Next, swap insurance information with all parties involved in the accident - this will make all future actions easier.
  3. Contact your rideshare insurance company to report it. Never ignore this step! If you do, you could risk not being covered.

Our Top Choices For Rideshare Insurance Policies In the U.S.

Thanks to that little gray area during Period One, many companies offer insurance just for this time frame, which can give you great peace of mind as a rideshare driver.

Another thing you may want to consider when picking a plan is the state you live/work in. We recommend first checking to see if the auto insurance company you already have personal vehicle coverage through will do rideshare insurance, then look elsewhere if necessary.

Below are the top considerations for rideshare insurance we found for Uber and Lyft drivers in the United States:

Allstate - Rideshare Driver Insurance

Allstate doesn’t cover all states, but provides a great solution to help you get coverage for that vulnerable Period One time in over 40 states:

States covered: AL, AR, AZ, CA, CO, DC, DE, GA, HI, IA, ID, IL, IN, KS, KY, LA, MA, MD, ME, MN, MO, MS, MT, NE, ND, NH, NJ, NM, NV, OH, OK, RI, PA, SC, SD, TN, TX, UT, VA, VT, WA, WI, WV

Geico - Rideshare Driver Insurance

Geico offers rideshare insurance in most states. However, we found that this type of insurance was more expensive than other companies, with an average increase of $150 in annual costs:

States covered: AL, AR, AZ, CO, CT, DC, DE, FL, GA, IA, ID, IL, IN, KS, LA, MD, ME, MN, MO, MS, MT, NE, NM, ND, OH, OK, OR, PA, RI, SC, SD, TN, TX, VT, VA, WA, WV, WI, WY

Progressive - Rideshare Driver Insurance

Progressive has recently gotten on board with praising rideshare drivers who partner with their rideshare insurance policies:

States covered: AZ, CA, GA, IL, NV, OK, TX

State Farm - Rideshare Driver Insurance

State Farm takes their rideshare insurance coverage to the next level, offering coverage that extends past Period One. They allow drivers to deal with claims through their personal insurance, even with incidents that occur during Period Two or Three!

States covered: AZ, CO, IL, IN, KS, MN, MS, OK, OR, TN, UT, WA, WI

USAA - Rideshare Driver Insurance

If you’re a military member, you can get some killer rideshare insurance for you and your family from USAA. They help fill that Period One gap for as little as 8 bucks per month!

States covered: AZ, CA, CO, IL, MA, OH, TX, WA

Want to find the best value for your hard-earned dollar? You can compare rideshare insurance from multiple providers here.

What If Rideshare Coverage Isn’t Available Where I Live?

Sadly, every state doesn’t have options for rideshare car insurance.

If this is the case where you reside, you may want to consider switching to a company that does provide this service if you plan to continue driving for Uber or Lyft. If you still have no luck, you may have to consider getting a more expensive commercial policy with comprehensive coverage.

Rideshare Insurance Policies with Uber and Lyft

Uber and Lyft both offer their own auto coverage to those who drive for them. Below you can read through the policy requirements:

Uber Rideshare Driver Policy Requirements

Uber covers drivers with a whopping $1 million liability policy. Coverage begins as soon as you receive a ride request and ends when your passenger reaches their destination.

They also include a $1 million underinsured/uninsured motorist policy with an $1,000 deductible, which covers any occupants within the Uber vehicle if in an accident with an uninsured driver.

Uber even offers insurance for drivers who are on the road searching for passengers but who have not accepted a trip, which also falls under the liability coverage for bodily injury. Limits for coverage are $100,000 per accident, $50,000 per person, with the addition of $25,000 for any damage to property.

Keep in mind that your own expenses will not be covered by Uber - this is where your personal policy covers you.

Rideshare Insurance Policies with Uber and Lyft

The Bottom Line of Rideshare Insurance

If you choose to forego the proper coverage while driving for any rideshare company, you could be creating a recipe for your own financial disaster. This could translate into the loss of your license, your rideshare gig, and much more.

The choice is ultimately up to you, but we high suggest getting the necessary coverage before you start driving and picking up passengers.

Do you rarely use your car and want to save money on insurance, period? We recommend you checking out Metromile. You could save as much as $600 per year!

Top Insurance Options for Rideshare Drivers 2019

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Ruby Noel

Ruby Noel

Ruby Noel is an online content creator who crafts written and digital content for brands in a variety of industries. She prides herself on creating content that adds value to everyday lives while helping her clients boost sales and rankings. To learn more about Ruby, check her out at rubyciara.com

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