Rideshare Insurance: Everything You Need to Know

What is rideshare insurance?

Rideshare coverage extends your personal auto policy while you’re working for companies like Uber and Lyft but haven’t accepted a ride request yet. Once you have accepted a ride, coverage from Uber and Lyft takes over.

Working as a rideshare driver complicates the seemingly straightforward relationship between personal auto insurance — the type of policy most drivers carry — and commercial car insurance. Insurance companies had to create entirely new rules and regulations to accommodate the growing trend of ridesharing via companies like Uber and Lyft. This classification of car insurance is now known as rideshare coverage — it's available for purchase as an add-on — also known as an endorsement — through most insurance companies.

1. How does rideshare insurance work?
2. Do I need rideshare insurance?
3. How much is it by insurance provider?
4. What kind of coverage does Lyft/Uber provide to their drivers?
5. What to do if you have an accident while driving for Uber or Lyft
6. What does rideshare insurance in my state look like?

How rideshare car insurance works for Uber and Lyft

If you are a Lyft or Uber driver, it's vital for you to know how your personal insurance and rideshare insurance policies differ. We'll start by breaking down how auto insurance coverage for the two largest ridesharing companies works:

RIDESHARE INSURANCE BREAKDOWN

Period 0: This is when the driver is not using a rideshare app. This could include trips such as going to the doctor's office or the grocery store.

Period 1: This period begins when an Uber or Lyft driver is using their personal car — with the app active — but has not yet received a pick-up request. Here, you would be covered by rideshare insurance and Uber's and Lyft' insurance coverage. Therefore, you need rideshare coverage. Although both Uber and Lyft's insurance is active during this period, they only offer liability coverage for other vehicles or passengers. In essence, your vehicle has no protection that would be provided by standard comprehensive and collision coverages. Rideshare insurance extends your personal auto policy to cover your vehicle.

Period 2: Period 2 begins when a driver has the app active, has received a request, and is en route to pick up a rider. This is when your personal policy and rideshare insurance cease to provide coverage. At this point, all insurance coverage is handled by Lyft or Uber.

Period 3: This period begins when you have the app open and are currently driving your customer to their destination. Lyft's or Uber's insurance policies cover this period.

With the rideshare endorsement, the coverage provided by your personal auto policy is extended through period 1, taking care of any coverage gaps that could prove costly. Periods 2 and 3 are identical in terms of insurance coverage details. From the time you receive a ride request to the time you drop the rider off, you have coverage through Uber or Lyft. The amount of coverage varies per rideshare service and by geographic location.

Why does rideshare insurance exist?

In addition to providing coverage for the period when a driver is awaiting a ride request, rideshare coverage makes it so your insurance company can’t cancel your policy for being a rideshare driver. Most motorists have their cars insured for personal use. Using your vehicle in a business fashion — as rideshare drivers do — could actually require a more costly commercial policy. Commercial insurance and personal use policies are very different in what they cover and how much they cost. It is imperative that you find the right insurance option if you want to stay insured and ensure claims are paid out by your insurance provider.

How much is rideshare coverage: by company

Using a methodology outlined here, we discovered that adding a rideshare endorsement to your car insurance policy will raise your rates an average of $94. Below are some car insurance providers that include this coverage as well as some estimated rates.

Keep in mind, rideshare availability will be subject to state and insurance provider availability. This data reflects costs paid by an average user profile in the U.S.

Enter your ZIP code below to see rates for your exact user profile.

Lyft & Uber insurance coverage

Uber insurance coverage

Lyft insurance coverage

While Lyft and Uber both follow the Period 0-3 guidelines, the amount of coverage they offer to their drivers varies. Both Lyft and Uber use Contingent Collision and Comprehensive coverage during periods 2 and 3. By this, they mean their collision and comprehensive coverage are dependent on your personal policy also having the same coverage. Lyft and Uber each offer limits of $50K per person for bodily injury, $100K per accident for bodily injury and $25K per accident for property damage (read as 100/50/25) — all of which are designed to meet or exceed state limits. If your state requirement is 50/100/30, Lyft will match that — raising the property damage limit to $30,000. However, Lyft and Uber will not lower their limits to meet a state’s requirements and will always retain, at minimum, their 50/100/25 company regulations.

Lyft and Uber differ in the monetary value of deductibles they offer during periods 2 and 3. Uber offers a $1,000 deductible for collision and comprehensive claims while Lyft sets its deductibles at $2,500 with a maximum payout of $50,000 per accident.

What to do if you're in an accident while driving for Uber or Lyft

Whether you are driving for a rideshare service or not, the first thing you should do in an accident is to contact the police. Afterward, you can start thinking about insurance. You'll need to make sure that you follow your company's protocol in such a situation, which depends on which period you are in. If you are on your way to pick up a fare or are currently carrying a passenger when the accident occurs — periods 2 or 3 respectively — Uber and Lyft's coverage works fully, covering any damages or injuries that you cause up to $1 million.

Both companies offer collision and comprehensive coverage to cover damages to your vehicle as well, but only if you carry them on your personal policy. Accidents that occur during period 0 fall under your personal policy and should be reported as such — unless your state or rideshare company stipulates otherwise. Uber and Lyft provide liability-only coverage during period 1, so a rideshare policy is critical to prevent coverage gaps.

If you need assistance or want a rideshare insurance quote, please call 888-444-2833 or click the button below.

Uber and Lyft insurance coverage requirements and the best rideshare insurance by state

*If you just glanced at this table and your head is already spinning, Ask an Agent about rideshare insurance and we'll help you out.