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Ridesharing insurance policies


If you just started working for Uber or Lyft, you may be wondering how ridesharing insurance policies work. Here we explain everything you need to know about Uber insurance and Lyft insurance.

The ridesharing insurance dilemma

Insurance coverage has been a problem since the earliest days of ridesharing and while solutions are starting to appear, there are serious limitations.

It's true that all the major transportation network companies (TNCs), such as Uber and Lyft, protect their drivers with huge liability policies. Unfortunately, there are coverage gaps that can leave drivers on the hook for some major expenses. At issue:

  • During Period 1 (app is open but no passenger has been assigned) liability limits are low and the coverage is contingent in most states, meaning the driver has to make a claim with their own insurer before a TNC's insurance steps up.
  • The cost to repair their vehicle falls to drivers during Period 1 as TNC's offer zero collision or comprehensive. Once a passenger is assigned, collision/comprehensive coverage is contingent so a driver must notify their personal insurer about an accident.
  • Medical bills can also be a problem. A passenger's medical bills sould be covered in any type of accident, but the driver's injuries may only be covered if someone else caused the crash.

Ridesharing insurance policies

Insurers and state regulators are finally addressing the problem.

Recently, regulators in California and Maine removed the contingency for liability coverage so private insurance does not apply during Period 1. Drivers must either purchase a commercial policy, a rideshare policy or the TNC must provide coverage.

Drivers in certain states (where regulators have passed rideshare laws) are protected by the TNC's liability policy during Period 1 but the limits are low, typically 50/100/25, which translates into $50,000 per person bodily injury, up to $100,000 per incident, and $25,000 for property damage.

"These limits are low when compared to the 100/300/100 that most experts recommend," says Penny Gusner, consumer analyst for CarInsurance.com. "In a serious accident, these limits would be exceeded pretty quickly, leaving you on the hook for the balance."

In addition, repairs to your vehicle are remain uncovered, as do injuries, and without a rideshare-specific policy your personal insurance may be essentially worthless.

Chancing it with only the TNC's coverage during Period 1 is a bad idea, according to most experts. "Personally, I don't think it's worth the risk to become a rideshare driver unless you can get a rideshare-friendly policy in your state," warns Harry Campbell, "The Rideshare Guy" blogger.

Ridesharing insurance isn't offered by all insurers in every state by any means, but insurers are starting to close insurance gaps with policies that cover rideshare activities. Ridesharing insurance coverage is offered by at least one carrier in all states except New York, where you must have a commercial policy if operating within city limits. Even in New York, Allstate offers a commercial policy tailored to Uber drivers outside of NYC, and rideshare forum commenters have said that MetLife offers coverage for outside of the city, but doesn't advertise it.

For car insurance companies offering ridesharing coverage in other states, coverage varies; some insurers only cover Period 1 while others cover the entire ride.

Ridesharing insurance by state

StateCompanyPeriod of coverage
AlaskaAllstateAll*
AlabamaAllstateAll*
Farmers InsurancePeriod 1
GeicoAll
ProgressiveAll
State FarmAll**
USAAPeriod 1
ArizonaAllstateAll*
Farmers InsurancePeriod 1
GeicoAll
Mercury InsuranceAll**
ProgressiveAll
SafecoPeriod 1
State FarmAll**
USAAPeriod 1
ArkansasAllstateAll*
Farmers InsurancePeriod 1
GeicoAll
State FarmAll**
CaliforniaAllstateAll*
EsurancePeriod 1
Farmers InsurancePeriod 1
GeicoAll
Mercury InsuranceAll**
Metlife***Period 1, 2
State FarmAll**
USAAPeriod 1
ColoradoAllstateAll*
Farmers InsurancePeriod 1
GeicoAll
Metlife***Period 1, 2
SafecoPeriod 1
State FarmAll**
TravelersPeriod 1
USAAPeriod 1
ConnecticutAllstateAll*
GeicoAll
State FarmAll**
DelawareAllstateAll*
GeicoAll
ProgressiveAll
State FarmAll**
District of ColumbiaAllstateAll*
ErieAll
GeicoAll
State FarmAll**
FloridaFarmers  (Foremost)Period 1
GeicoAll
State FarmAll**
GeorgiaAllstateAll*
FarmersPeriod 1
MecuryAll**
ProgressiveAll
State FarmAll**
USAAPeriod 1
HawaiiAllstateAll*
IdahoFarmersPeriod 1
GeicoAll
ProgressiveAll
State FarmAll**
IllinoisAllstateAll*
ErieAll
FarmersPeriod 1
GeicoAll
Mercury InsuranceAll**
Metlife***Period 1, 3
ProgressiveAll
SafecoPeriod 1
TravelersPeriod 1
USAAPeriod 1
IndianaAllstateAll*
ErieAll
FarmersPeriod 1
GeicoAll
ProgressiveAll
SafecoPeriod 1
State FarmAll**
USAAPeriod 1
IowaAllstateAll*
FarmersPeriod 1
GeicoAll
ProgressiveAll
State FarmAll**
USAAAll*
KansasAllstatePeriod 1
Farmers InsurancePeriod 1
GeicoAll
SafecoPeriod 1
State FarmAll**
USAAPeriod 1
KentuckyAllstateAll*
ErieAll
ProgressiveAll
State FarmAll**
USAAPeriod 1
LouisianaAllstateAll*
GeicoAll
State FarmAll**
MaineAllstateAll*
GeicoAll
ProgressiveAll
State FarmAll**
MarylandAllstateAll*
ErieAll
FarmersPeriod 1
GeicoAll
State FarmAll**
USAAPeriod 1
MassachusettsAllstateAll*
GeicoAll
ProgressiveAll
USAAPeriod 1
MichiganFarmers InsurancePeriod 1
ProgressiveAll
State FarmAll**
MinnesotaAllstateAll*
Farmers InsurancePeriod 1
GeicoAll
ProgressiveAll
SafecoPeriod 1
State FarmAll**
MississippiAllstateAll**
GeicoAll
ProgressiveAll
MissouriAllstateAll*
Farmers InsurancePeriod 1
GeicoAll
ProgressiveAll
SafecoPeriod 1
State FarmAll**
MontanaAllstateAll*
Farmers InsurancePeriod 1
GeicoAll
State FarmAll**
NebraskaAllstateAll*
Farmers InsurancePeriod 1
GeicoAll
ProgressiveAll
State FarmAll**
USAAPeriod 1
NevadaAllstateAll*
Farmers InsurancePeriod 1
Mercury InsuranceAll**
State FarmAll**
USAAPeriod 1
New JerseyAllstateAll*
Farmers InsurancePeriod 1
State FarmAll**
USAAPeriod 1
New HampshireAllstateAll*
GeicoAll
State FarmAll**
New MexicoAllstateAll*
Farmers InsurancePeriod 1
GeicoAll
ProgressiveAll
State FarmAll**
North CarolinaAllstateAll*
North DakotaAllstateAll*
Farmers InsurancePeriod 1
GeicoAll
ProgressiveAll
State FarmAll**
USAAPeriod 1
OhioAllstateAll*
ErieAll
Farmers InsurancePeriod 1
GeicoAll
ProgressiveAll
State FarmAll**
USAAPeriod 1
OklahomaAllstateAll*
Farmers InsurancePeriod 1
GeicoAll
Mercury InsuranceAll**
ProgressiveAll
SafecoPeriod 1
State FarmAll**
USAAPeriod 1
OregonAllstateAll*
FarmersPeriod 1
GeicoAll
SafecoPeriod 1
State FarmAll**
USAAPeriod 1
PennsylvaniaAllstateAll*
ErieAll
GeicoAll
ProgressiveAll
State FarmAll**
Rhode IslandAllstateAll*
GeicoAll
ProgressiveAll
South CarolinaAllstateAll*
GeicoAll
State FarmAll**
South DakotaAllstateAll*
GeicoAll
ProgressiveAll
TennesseeAllstateAll*
ErieAll
Farmers InsurancePeriod 1
GeicoAll
ProgressiveAll
SafecoPeriod 1
State FarmAll**
USAAPeriod 1
TexasAllstateAll*
Farmers InsurancePeriod 1
MecuryAll**
Metlife***Period 1, 2
ProgressiveAll
State FarmAll**
USAAPeriod 1
UtahAllstateAll*
Farmers InsurancePeriod 1
SafecoPeriod 1
State FarmAll**
VermontAllstateAll*
GeicoAll
State FarmAll**
VirginiaAllstateAll*
ErieAll
GeicoAll
ProgressiveAll
State FarmAll**
WashingtonAllstateAll*
GeicoAll
Metlife***Period 1, 2
SafecoPeriod 1
State FarmAll**
USAAPeriod 1
West VirginaAllstateAll*
ErieAll
GeicoAll
ProgressiveAll
State FarmAll**
WisconsinAllstateAll*
ErieAll
Farmers InsurancePeriod 1
GeicoAll
SafecoPeriod 1
State FarmAll**
WyomingAllstateAll*
GeicoAll
State FarmAll**
USAAPeriod 1

* Period 1 - all coverages, Period 2 & 3 -  Allstate provides deductible help in certain situations

** Period 1 - full coverage available, Periods 2 & 3 - Mercury and State Farm provide coverage in excess of ridesharing company coverage

*** MetLife initially only covered Lyft drivers, and for all three periods of ridesharing services. In 2017, MetLife began to cover all ridesharing companies, but only for Period 1 & 2. However, in-force Lyft policies covering all three periods were grandfathered in so coverage still applies to all phases in those cases.

Rideshare drivers and insurance: Many still lacking coverage

There have always been issues when it comes insurance for rideshare drivers and while numerous insurance companies now offer a rideshare endorsement, many drivers still take their chances when it comes to coverage.

According to The Rideshare Guy 2018 survey of 1,200 drivers, 46.5 percent of respondents said they have purchased rideshare insurance while 46.8 said they have not. The rest declined to comment which more than likely means they are not carrying a rideshare policy.

Why risk hitting the road without coverage? While the availability of rideshare insurance as well as the cost can be factors, Campbell speculates that drivers are simply unaware of the need, "I think the biggest reason is that drivers are just unaware they need special rideshare coverage to drive. Many simply do not know that rideshare driving is typically not covered by personal insurance companies or that Uber and Lyft's policies are not adequate."

The data also showed that 55 percent have notified their personal insurance company that they are a rideshare driver while 28 percent have kept their insurer in the dark and 9.7 declined to answer.

Luckily, only 17.3 percent of respondents have had to make a claim on their insurance while working for a rideshare service.

Gusner offers the following tips to ensure you have sufficient coverage:

  • Review your personal policy, as well as what is offered by the ridesharing company, and be sure there are no gaps in coverage, especially during the time your app is on and you're waiting for a customer to ask for a ride.
  • Regardless of whether your ridesharing coverage applies to the entire time you're on the job or not, you still must tell your personal insurance company that you are working for a ridesharing service, otherwise you risk having your own policy canceled.
  • Buy liability limits on your own policy as follows: $100,000 to pay for injuries to others in an accident you cause; $300,000 per accident; $100,000 to pay for damage to other cars and property
  • Uninsured/underinsured motorist covereage is required in some states, and others allow you to reject it. Don’t. If you are in an accident and the other driver is at fault but doesn’t have car insurance, uninsured motorist covers your injury-related medical expenses and those of your passengers. It can cover your lost wages and pain and suffering. If the driver who hit you has insurance, but low limits, underinsured coverage will cover the difference. Choose coverage amounts that match your own liability limits.

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2 Responses to "Ridesharing insurance policies"
  1. Charles O. Slavens

    Who is most likely to need ride-sharing services? The biggest group would be people who can no longer drive due to age or physical disability. Where do most of these people live? Florida. There are hundreds of people with cars in this state driving people around for a fee. None of them has commercial insurance. It is in retirement states like Florida where this insurance is needed the most.

      Reply»  
  2. Al

    I read that Mercury is also offering TNC insurance in California.Is this correct?

      Reply»  
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