Continuous car insurance coverage is essential for rideshare drivers. Personal insurance typically doesn’t cover drivers using their cars for business purposes.
While ridesharing companies — Lyft, Uber, etc. — offer limited liability coverage options when a vehicle is in service, drivers may find that auto insurance excludes coverage between customers. This can create a coverage gap. Rideshare insurance can save you out-of-pocket expenses in an accident and help you avoid coverage cancellation by your insurer.
Learn more about rideshare car insurance and its cost, Lyft and Uber coverage policies and what happens when you’re in an accident as a rideshare driver.
- During their workday, rideshare drivers may experience gaps in coverage between their auto policy and the rideshare company’s insurance.
- Rideshare insurance is add-on coverage providing coverage during gap periods when drivers are waiting to be matched with their next customer.
- Rideshare service companies, such as Lyft or Uber, typically offer low coverage or limited liability.
What is rideshare insurance?
Ridesharing services, or a Transportation Network Company (TNC), must provide some insurance coverage for their drivers.
However, it may be limited liability or low coverage policies. Rideshare insurance is an additional coverage option that drivers add to their car insurance policies.
Understanding gap periods—between commercial work and personal driving—may be helpful in determining how this coverage works.
You’re in a gap period when you turn on your app and wait to be matched with a customer. This means you’re likely not covered by your or your rideshare company’s insurance. Let’s look at a typical work day:
- The app is off: Your car insurance policy coverage is in effect.
- The app is on and you’re waiting for a ride request: Your policy is not covering you, but some coverage is provided through your rideshare service.
- A ride is accepted: Driving to pick up your customer, you’re covered by your rideshare service insurance (i.e., your Uber car insurance policy is in effect).
- The customer is in the car: You’re still covered by your rideshare service insurance policy.
- The ride is complete and you’re waiting for the next request: If you’re still working, you’re in a gap period where your personal policy coverage is likely not in effect. You and your rideshare service insurance will provide limited liability coverage.
If you’re involved in an accident while your rideshare app is still on and you’re not with a customer, you may have out-of-pocket expenses for medical bills or repairs.
Ridesharing car insurance policies generally have low limits and high deductibles ranging from $1,000 to $2,500. Rideshare insurance could help provide additional protection in a situation like this.
Do you need a rideshare insurance endorsement?
Most insurance companies don’t require a rideshare insurance endorsement; however, it’s often a recommended and affordable option that provides continuous car insurance coverage and ensures you are protected while working. It’s important to remember that personal auto policies don’t offer coverage for business operations.
Delivery driver insurance for Grubhub or DoorDash employees is also typically covered through ridesharing insurance. Some delivery service companies offer TNC coverage policies, while local businesses may not.
What does rideshare insurance cover?
One of the main challenges of Uber and Lyft insurance policies is that they generally come with low coverage limits.
Lyft’s coverage and Uber’s coverage include the following:
- $100,000 of bodily injury coverage per accident
- $25,000 of property damage coverage per accident
- $1 million coverage if you were to get into a covered accident while the app is on.
CarInsurance.com’s team has compiled all the essentials and need-to-know details about Uber car insurance and Lyft car insurance to help you better understand coverage, limitations and whether rideshare insurance is a good option for you.
It’s important to know that Uber and Lyft liability coverage limits are lower than what’s recommended by experts:
- $100,000 of bodily injury coverage per person
- $300,000 of bodily injury coverage per accident
- $100,000 of property damage coverage per accident
Remember, not having additional coverage means paying higher out-of-pocket costs if you’re in an accident.
What insurance companies offer rideshare coverage and how much does it cost?
Many major insurance companies, including Allstate, American Family, Geico, Mercury, Progressive and State Farm, offer a rideshare endorsement, which can be added to your policy. Of course, your rate will vary depending on the company you choose, where you live, coverages and your driving history.
State Farm says its rideshare driver coverage adds about 15% to 20% to a person’s existing State Farm policy.
Another factor to remember is that rideshare coverage varies by state and isn’t available everywhere.
For example, Geico’s rideshare coverage is only available in 39 states, not Alaska, Georgia, Hawaii, Kentucky, Nevada, New Jersey, New York, North Carolina, Texas or Utah.
Also, some insurers offer coverage for all three periods, while others don’t. Geico provides coverage for every phase of your trip, while Allstate’s rideshare endorsement only offers coverage during period 1. If you had an accident during the other two periods, you’d have to file a claim with Uber or Lyft.
FAQ: Rideshare insurance
How much does rideshare insurance cost?
Based on your insurer, rideshare insurance typically costs $6 to $27 monthly, or 15% to 20%. Not all insurers offer rideshare insurance but may provide commercial insurance policies. Some insurers offer rideshare coverage but don’t offer it in all states.
Contacting your insurance company for a quote is your best bet for determining how much rideshare insurance will cost. Below is a list of some insurers offering rideshare insurance and a sampling of costs by insurer in the table.
Here are a few insurance companies that offer rideshare insurance:
- Allstate
- American Family Insurance
- Farmers
- Geico
- Mercury
- Progressive
- Safeco
- State Farm
- USAA
| Insurance company | Rideshare insurance cost |
|---|---|
| Allstate Insurance | $15 to $20 monthly |
| American Family Insurance | 15% of the current premium |
| Mercury Insurance | Starts at a minimum of $0.90 daily or $27 monthly |
| Progressive Insurance | This rate varies by state and coverage limits |
| Safeco Insurance | $10 or less monthly |
| State Farm | 15% to 20% of the current premium |
| USAA | Starts at $6 monthly |
How do you buy rideshare insurance?
Rideshare insurance can be added to your auto policy by contacting your insurer. It’s typically not offered as a standalone policy, so you must add it to your current car insurance policy. You can also shop around for a new policy and include it in the quote.
When contacting your insurer, or quote shopping, let them know which TNC coverage you have and that you’re a rideshare driver. This can help identify gaps in coverage you may have, what additional coverage options are available and help you cost compare.
Remember, some insurance companies don’t offer rideshare insurance in all states. In that instance, a commercial policy may be required.
What happens if you get into an accident while driving for Uber or Lyft?
Your insurance company should know you’re a rideshare driver, especially if you’re involved in an accident while working. Based on the type of accident and coverage options you have determines what happens next. The following are some possible scenarios:
You’re not working and driving your vehicle: Contact your and the other driver’s insurance companies after the accident. Coverage would fall on your auto insurance policy.
You’re working but waiting for a customer: Your auto policy will typically not cover this type of accident. The rideshare company’s policy will give third-party liability. Remember, your injuries or vehicle damage is not covered under this policy. If you did have rideshare insurance or an endorsement, coverage would typically apply in this scenario.
You’re working and with a customer or en route to pickup: The rideshare company’s insurance policy will cover this accident type and typically provide the following coverage:
- Uninsured/underinsured coverage (UM/UIM) if the accident was another driver’s fault and they don’t have sufficient car insurance coverage.
- Contingent collision and comprehensive coverages (subject to a $2,500 deductible) apply despite fault, and will cover the rideshare driver’s vehicle damages. However, the rideshare driver must also have full coverage on their auto policy for damage coverage.
- Third-party liability coverage up to $1 million.
Final thoughts: Rideshare insurance
With the growing increase and reliance on rideshare services, ensuring you, your vehicle and your customers are protected is essential. Investing in an affordable gap coverage option, such as rideshare insurance or an endorsement, can provide coverage while working but waiting for your next customer. Remember, if you only rely on your rideshare company’s insurance coverage, you may be looking at paying out-of-pocket for injuries and damages.
It’s crucial your insurance company knows that you’re a rideshare driver and can provide you with options that cover accident damage and medical bills. Suppose you’re in an accident and your insurance company doesn’t know you’re a rideshare driver. In that case, you could be looking at not only claim denials, but they may cancel your policy.
Resources & Methodology
Sources
- Allstate. “What does rideshare insurance cover? Accessed July 2023.
- American Family Insurance. “Rideshare coverage.” Accessed July 2023.
- Farmers Insurance. “Rideshare insurance.” Accessed July 2023.
- Mercury Insurance. “Rideshare car insurance.” Accessed July 2023.
- Nolo. “What If I’m In an Accident While Driving for Uber or Lyft?” Accessed July 2023.
- Progressive. “Rideshare insurance.” Accessed July 2023.
- Safeco. “Rideshare car insurance.” Accessed July 2023.
- State Farm. “What is rideshare coverage?” Accessed July 2023.
- USAA. “Rideshare gap protection coverage.” Accessed July 2023.
Methodology
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