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Uber logoIf you want to work for Uber, don't overlook one extremely important piece of the rideshare puzzle --Uber driver insurance. While Uber touts its million-dollar liability policy, there are definite gaps in the coverage that could leave you holding the bag, especially when it comes to repairing your own vehicle after an accident.

Here is information about ridesharing insurance, that shows which insurance companies have special add-on coverage for Uber and Lyft drivers and in which states its offered. Buying one of these policies is your best bet for making sure you are sufficiently covered. Here we explain why.

A few facts about ridesharing insurance

Insurers (and regulators) have broken the rideshare experience into three "periods":

Period 1: You are driving around town with the Uber app open, but have not yet been matched with a rider.

Period 2: You have been assigned a rider and are en route to pick him or her up.

Period 3: The rider is in your car. This period ends when the rider exits the vehicle.

There are three types of car insurance you should be concerned with as a ride share driver:

  • Liability
  • Collision/Comprehensive
  • Uninsured/Underinsured Motorist

These three coverages should protect you in most situations. While Uber does offer all three of these coverages during various "periods," the coverage levels vary and in many cases the coverage is contingent, which can create potential problems for you.

What Uber's insurance covers

Uber's coverage levels vary dramatically depending upon whether or not there is a rider in the car. While they do offer contingent collision/comprehensive coverage, the deductible is often high. Here is a quick overview of what Uber offers their drivers:

Period 1

Low liability limits and zero collision/comprehensive make this the most dangerous period for a driver's bank account. A collision in Period 1 can cost you big. Some drivers find an open parking lot and wait to receive notice of a rider rather than drive around, using gas and exposing themselves to potential accidents.

  • Liability

Uber offers a liability policy with limits of 50/100/25. This means $50,000 per injury, $100,000 per incident and $25,000 in property damage coverage. Although these coverage levels are higher than the majority of state minimums, they fall well below the 100/300/50 that most experts recommend.

It is important to remember that this is contingent coverage in most states, which means you must first file a claim with your insurer and if your claim is denied, Uber's policy kicks in. California is currently the only exception, requiring rideshare companies to offer primary Period 1 liability coverage.

  • Collision and Comprehensive

During Period 1, Uber doesn't offer any collision/comprehensive. This means that if you do not have collision/comprehensive on your personal policy you may be responsible for all costs to repair your car in the event of an accident.

  • Uninsured/Underinsured

Uber does not offer any uninsured/underinsured coverage during Period 1.

The takeaway

Contingent coverage means that you must inform your insurer, via the claim, that you are driving for Uber. In most cases, your insurer will not only deny the claim, they are also likely to cancel your policy. This can leave you on the hook for repair costs to your car.

Uber's liability limits are fairly low, so if you are in an accident, you could be responsible for damages that are not covered by the Uber policy. In a serious accident, these low liability limits could quickly be used up.

If you don't have health insurance, an uninsured/underinsured policy is a good idea.

Period 2 and 3

Uber's strong liability coverage should be enough but the contingent collision/comprehensive can make getting your own vehicle repaired difficult.

  • Liability

Uber has a $1million liability policy in force, which should protect you even in the most serious of accidents.

  • Collision and Comprehensive

Uber's collision/comprehensive policy is contingent and is only available if you have collision/comprehensive on your personal policy. If your insurer denies your claim (which is likely) Uber's policy steps into the breach. The policy has a $1,000 deductible, which is yours to pay.

  • Uninsured/Underinsured

Uber has a $1million policy, which should be generous coverage.

The takeaway on Uber insurance

Driving for Uber, or any rideshare company, without a personal collision/comprehensive policy is an awful idea. While your personal insurer may deny your collision claim, your car should eventually be repaired thanks to Uber's collision policy. Without a personal collision/comprehensive policy, you are completely out of luck and must pay to repair your vehicle yourself.

Will my personal policy serve as insurance for Uber?

Your personal policy only protects you when you are driving your car for personal reasons and do not have the Uber app open.

All personal insurance policies contain a clause that excludes commercial activities, such as pizza delivery, paper delivery and driving strangers around in your car for pay.

Unfortunately, what this means for you is that your insurer can legally deny any claim you make while driving for Uber or any other rideshare company. This is information that many rideshare companies neglect to highlight during the sign-up process leaving drivers under the mistaken belief that they are fully covered.

However, insurers have finally accepted the fact that ridesharing is not going away anytime soon and have started offering a policy endorsement specifically for rideshare drivers.

The coverage levels in ridesharing insurance policies vary, with some only offering protection during Period 1 while other companies provide protection through all three periods. Prices vary depending upon which insurer you use, your vehicle and your driving record.

How do I get insurance as an Uber driver?

Ridesharing insurance policies are rolling out slowly and are currently available from at least one car insurance company in every state. The exception is New York, where you must have a commercial policy to work as a rideshare driver within the city. Allstate offers a commercial policy tailored for Uber drivers in NYC, while rideshare forum members have said MetLife offers ridesharing coverage outside of the city, but doesn't advertise that it does so.

If you are lucky enough to live in a state where rideshare insurance is offered, your best option is to switch to a rideshare driver policy. This is the only way (besides a commercial policy) that you can be fully protected and not have to worry about having your policy cancelled just for making a rideshare-related claim.

If you don't live in one of these states, and can't afford a commercial policy, relying on your personal policy may be your only option, just be aware that you could end up with a cancelled policy and a denied claim at some point.

It's important to remember that if you are driving for both Uber and Lyft, a policy dedicated to a specific TNC won't offer protection if you are driving for the wrong company at the time of an accident.

In the end, it is up to you to make sure you are fully protected before picking up your first passenger. Carefully research all of your options and never assume that you are completely protected by Uber's policy. Don't put yourself at risk, like some drivers who failed to get additional coverage, according to a 2018 survey of rideshare drivers who were asked about pay, insurance and other topics relating to the job.