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If you want to work for Uber, you won’t just need to fill out an application, undergo a background check and download the app. You’ll also need insurance.

Uber offers "Driver-Partner Insurance," an insurance coverage that comes with several gaps. These gaps could increase your financial liability if you get into an accident.

That's why it's important to have rideshare insurance. Here's an overview of which insurance companies offer this additional coverage for Uber drivers and in which states and what you should know before signing up for a policy.

Levels of Rideshare Insurance

Insurance companies have divided the rideshare experience into three main coverage periods:

  • Period 1: The Uber app is on, but you haven't been matched with a passenger and you're waiting for a ride request.
  • Period 2: You've accepted a ride request and are on your way to pick up a passenger.
  • Period 3: The passenger is in your car. This period ends when the passenger exits the vehicle.

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

These three coverages should protect you in most situations. Uber offers all three of these coverages during various "periods." However, the coverage levels vary. In many cases, the coverage is contingent, which could increase your out-of-pocket costs if you're in an accident.

Uber's coverage levels vary dramatically depending upon whether or not there is a rider in the car. While they offer contingent collision/comprehensive coverage, the deductible is often high.

Here is a quick overview of what Uber offers its drivers:

  • Period 1: Uber offers third-party liability coverage during this period. The protection includes $50,000 in bodily injury coverage per person, $100,000 in bodily injury coverage per accident and $25,000 in property damage coverage per accident.
  • Periods 2 & 3: For these periods, Uber offers $1 million in third-party liability coverage, uninsured/underinsured motorist bodily injury coverage and contingent comprehensive and collision insurance that will cover up to the cash value of your car. However, the deductible for this coverage is $1,000.

Most insurance experts recommend:

  • $100,000 of bodily injury coverage per person
  • $300,000 of bodily injury coverage per accident
  • $100,000 of property damage coverage

Uber insurance coverage is considerably lower than the recommended levels. Not having enough coverage could increase out-of-pocket costs for potential car replacement costs, vehicle repairs and medical bills if you’re in an accident while driving for this rideshare service.

Will my Personal Car Insurance Policy Serve as Insurance for Uber?

Your personal auto insurance policy only covers your vehicle's personal use and protects you when the Uber app isn’t open.

Personal insurance policies contain a clause that excludes commercial activities. That includes delivery and driving for a rideshare service, taxi or limo service. Unfortunately, this means your insurer can legally deny any claim you make while driving for Uber or any other rideshare company.

Joel Ohman, a certified financial planner and the founder of CarInsuranceComparison.com, says you must disclose to your personal auto insurer if you're driving for a rideshare company. If not, the financial ramifications could be significant.

If rideshare drivers "ever find themselves needing to file a claim, then their insurance carrier may very well choose to deny their claim and even rescind their policy because of their lack of forthrightness," Ohman says.

Ohman adds that drivers now have more options for rideshare coverage. Rideshare insurance is designed to fill coverage gaps in Uber's driver-partner insurance.

"Some auto insurance carriers are beginning to offer a ‘Ridesharing Endorsement’ to their personal auto insurance policies designed specifically for Uber and Lyft drivers," he says.

However, the coverage levels differ for rideshare insurance policies depending on the insurer. Some only offer protection during Period 1, while others provide protection through all three periods. The cost will vary depending upon:

  • The insurer
  • Your vehicle
  • Your driving record

How do I Get Insurance as an Uber Driver?

Ridesharing insurance policies are available in many states.

For example, Geico offers a separate rideshare policy that's available in every state except Alaska, Georgia, Hawaii, Kentucky, Nevada, New Jersey, New York, North Carolina, Texas and Utah. Progressive offers coverage through a rideshare endorsement in most states except Alaska, California, Connecticut, Delaware, Hawaii, Kansas, Maryland, Montana, Nevada, New Hampshire, New Jersey, New York, North Carolina, Oregon, South Carolina and Vermont.

If rideshare insurance is available in your state, your best option is to check with your personal auto insurer to see if it offers a rideshare endorsement. If not, ask your insurer how it will affect your personal policy if you purchase separate rideshare coverage through another insurer. Just keep in mind that whatever option you choose will come with additional insurance costs. However, the added costs may be a worthwhile trade-off to ensure you're sufficiently covered.

In the end, it's up to you to make sure you're fully protected before picking up your first passenger. Carefully research all of your options and never assume that you're completely protected by Uber's policy.

"What's certain is that ridesharing companies like Lyft and Uber are here to stay. It will take some time for legislators as well as insurance carriers to catch up," Ohman says. "Until then, Lyft and Uber drivers should do all they can to get and keep adequate coverage so that they will not find themselves without protection should they ever need to file a claim."