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What Insurance Do You Need as a Gig Worker?

Make sure your insurance covers your side hustle

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By Susan Meyer
Updated January 27, 2026
Reviewed By Bree Matheson
Edited By Renata Balasco
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Susan Meyer

Senior Editorial Manager

Susan is a licensed insurance agent and has worked as a writer and editor for over 10 years across a number of industries. She has worked at The Zebr…

Credentials
  • Licensed Insurance Agent — Property and Casualty
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Bree Matheson

Insurance Insights Researcher

Bree Matheson joined The Zebra in 2025, where she conducts research focused on insurance and consumer behavior. She holds a PhD in Technical Communic…

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Renata Balasco

Senior Insurance Specialist

Renata joined The Zebra in 2020 as a Customer Experience Agent. Since 2021, she has worked as a licensed insurance professional and content strategis…

Credentials
  • Licensed Insurance Agent — Property and Casualty
  • 5 years of experience in the insurance industry
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  1. Types of gig workers
  2. Auto insurance for gig workers
  3. Coverage gaps
  4. Other coverage
  5. Delivery-specific considerations
  6. Questions drivers should ask

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Coverage for Nontraditional Jobs

America experienced a “gig economy” boom in the past few years, thanks in large part to the COVID-19 pandemic, corporate cost-cutting and mobile tech advancements. In a tumultuous economy, more workers have turned to short-term side hustles, with many driving for services like Uber, Lyft, Doordash, UberEats and Instacart. 

Today, over 70 million Americans (36% of the workforce) identify as gig workers, adding $1.27 trillion to the U.S. economy.[1] More than one in four workers participate in the gig economy in some way, and over one in 10 rely on gig work for their primary earnings.[2]

But these industrious independent contractors need to ask themselves a crucial question: What happens to your car insurance when you drive for a side gig? 

If you’re a rideshare driver or a food/grocery delivery driver, it’s important to know what’s covered vs. not covered by your car insurance. Truth is, insurance gaps – not the gig work itself – are the real financial risks here. 

Types of Gig Workers

At its core, gig work typically falls into two main categories.

➡️ App-based driving gigs

Many gig work opportunities today include food delivery through apps like Favor, Grubhub and Doordash or grocery delivery via Shipt, Instacart, Walmart or Amazon. Even local grocery chains are hiring their own shoppers and signing people up to be delivery drivers.
However, those who work on a contract basis aren’t officially employees of their contracted companies. Therefore, they’re usually not eligible for insurance benefits and other protections the company gives to full-time employees. To protect themselves, many gig workers must secure not only their own health and personal car insurance, but also liability and business coverage, depending on which gig they work.

➡️ Non-driving contract work

Of course, not all gig work involves driving. Pet sitters, writers, graphic designers, virtual assistants, handymen, personal shoppers, and content creators are among the types of old-school gig workers.

Employee vs independent contractor reality

If you drive for a gig company, it likely won’t provide sufficient car insurance for a simple reason: You are using your own car. Most gig companies also classify workers as independent contractors, which limits employer responsibility for traditional benefits.

“From an insurer’s point of view, providing full car insurance would create unpredictable exposure, particularly for catastrophic accidents,” says Loretta Worters, vice president of Media Relations for the Insurance Information Institute. “App-based platforms generally provide conditional coverage that activates only during certain app activity coverage phases, like “App on” (more on these phases later).[3]

Auto Insurance for Gig Workers

Car insurance options for people who use their vehicles for gig work include:

  • Personal auto policy (PAP): This covers non-commercial driving, including standard commuting. If you drive to a consistent place of work, such as a coffee shop, coworking space or a primary office, a PAP is typically all you need. However, coverage can vary if you frequently visit multiple project sites.
  • Rideshare endorsement: If you plan on being a rideshare or delivery driver of your own car, you can opt for this PAP add-on, which covers limited periods when you are logged into the platform. “This addresses coverage gaps between personal and platform insurance,” Worters continues.
  • Hybrid policy: If you drive only one vehicle for personal and commercial use, you can get a hybrid policy. This is especially useful for drivers engaged in multiple platforms or different types of delivery.
  • Commercial policy: When you need full commercial coverage for vehicles used primarily for business purposes, this is your best option. Drivers with a designated vehicle for gig work and a separate vehicle for personal use can insure their gig vehicle under a commercial policy and their personal use vehicle under a PAP. Commercial insurance covers the driver the same way a personal policy would, but it takes the higher risk of an accident into account and rates appropriately for it. 
file a claim

Telling Your Insurance Company

At the time you are shopping for insurance, tell your insurer that you plan to use your vehicle for gig work, and explain what this work entails and for what platform. Or, if you already have coverage and plan to start doing gig work, update your carrier. Keep in mind that full disclosure to your insurer is about protection, not punishment.

“From an underwriting perspective, insurers assess risk and set premiums based on declared vehicle use. Undisclosed gig activity creates unexpected exposure,” says Worters. 

Imagine you are involved in a crash while delivering packages in your personal car without notifying your insurer. In this scenario, your PAP may exclude coverage and deny your claim.

App “On/Off” Rules

Common sense dictates that when the rideshare app is on, you’re protected; when the app is off, you are not. But Amanda Demanda, a personal injury attorney, says this is a misconception that gets a lot of drivers in trouble.[4] 

“When the app is not turned on, you have zero coverage on the platform. Your only protection is your personal auto policy, and if you haven’t told your carrier that you drive for Uber or Lyft, you still have no protection,” she clarifies. “When you are logged in and waiting for a ride request, there is very little coverage from the platform: typically 50/100/25, and only if your personal auto policy does not apply.”

(50/100/25 means liability coverage up to $50,000 for bodily injury per person, $100,000 total for all injuries in one accident, and $25,000 for property damage you cause to others).

Lyft and Uber provide $1 million in third-party liability protection that covers medical bills, property damage and legal costs for passengers or other individuals harmed in an accident where the rideshare driver is at fault. But Demanda points out that this special coverage only goes into effect after you accept the ride request.  

Coverage Gaps and Risky Assumptions

One of the most common mistakes gig drivers make, particularly when they are just getting started, is assuming their PAP is enough.

“They think that so long as they meet the state minimum insurance requirements and have proof of insurance in the glove box, they are fully covered. But in reality, that’s often not the case,” says Beth Swanson, insurance analyst for The Zebra. “When you use a personal vehicle to earn money through ridesharing or delivery apps, you are typically engaging in business use. If your insurer is not aware of that, it can be considered a violation of your policy terms.”

Many drivers incorrectly assume that platform-provided coverage is in effect at all times, or that food delivery is covered the same as ridesharing. Actually, coverage differs based on activity and whether you are actively on a job.

“The real-world consequences can be serious. If you are involved in an accident while driving for gig work and your insurer wasn’t informed about this work, your claim may be denied – leaving you responsible for thousands of dollars in repair costs and lost income,” cautions Swanson. “You could also face policy nonrenewal or cancellation, which can create a coverage gap and make future insurance harder and more expensive to obtain.”

That’s why it’s always best to be transparent with your carrier about gig driving and make sure you have sufficient coverage in place.

Other Coverage to Know About

Car insurance isn't the only coverage to consider here. Depending on your side hustle, here are some other options to ponder.

General liability insurance

This is used by small businesses to protect them from liability, but can also apply to independent contractors. Companies consider general liability protection an "all-risk" coverage, protecting the policyholder from claims against them if someone is injured or their property is damaged due to something going wrong with the business property.

Commercial liability protection

If you lease a space that's open to the public, you may want to consider commercial liability insurance, a type of policy that provides coverage to a business for personal injury, bodily injury or property damage that results from the business’s operations or on the business’s premises.

Professional liability insurance

Also known as errors and omissions coverage, this is a policy that protects a policyholder from the fallout if they unintentionally give bad advice or wrong information. General liability insurance will not cover you if your client sues owing to issues of negligence, misrepresentation or malpractice. So if you’re in an industry where this could be a concern, you may want to talk to your provider.

Workers' compensation insurance

This pays out if a business owner gets sick or injured from a work-related incident. Typically, businesses offer this to employees, but because gig workers work for themselves rather than the gig companies, they'll only have this coverage if they purchase it on their own.

Temporary incapacity coverage

Also known as temporary disability coverage, this pays a cash benefit if a policyholder needs to take a break from working due to mental or physical health issues unrelated to the job. After all, gig work, like any other job, can be stressful.

Health-related coverage

Companies issue health insurance on a case-by-case basis. The ACA healthcare marketplace is a good place to start when shopping for health insurance. People looking for private insurance can receive credit depending on how much they estimate they’ll make during the year. They can also pick how much coverage they want and what to pay monthly.[5]

Delivery-Specific Insurance Differences

Rideshare drivers have a higher liability exposure because they transport passengers; coverage typically includes collision/comprehensive while a passenger is in the vehicle.

“When you carry people, the risk is higher. You’ve got human beings under your care who can be hurt, and then you have other people who may be involved in the accident,” notes Demanda.

A delivery driver, on the other hand, has a lower passenger liability. 

“Delivery risks focus more on cargo protection and collision exposure. Physical damage may be limited to en route deliveries, and coverage for goods can vary,” Worters says.

Overall, Demanda says delivery drivers tend to be more underinsured than rideshare drivers, “and the majority do not even know this until after the accident.”

Questions Drivers Should Ask

To help determine the right kinds of insurance coverage you need, ask yourself several questions, including: 

  • How often will I drive?
  • How far will I drive?
  • What platform will I use?
  • What cargo will I carry? 
  • What type of deliveries will I make?
  • Will I be a gig driver part-time or full-time?
  • Will I drive one vehicle or multiple vehicles?
  • Do I own, lease or finance the car I plan to use?
delivery full

Preparedness Is Important

When it comes to car insurance, it’s better to be sure than sorry. So take the time to learn what existing coverage you can count on versus extra protection you may need to fill in the gaps. Remember: The coverage you choose should be based on how you plan to use the vehicle, not your job title.

“Also, don’t forget that platform coverage is limited and conditional; relying on it alone is risky,” Worters says.

Most importantly, be upfront and honest with your insurance company about your true plans for using the vehicle as a gig worker.

Sources

  1. The State of the Gig Economy in 2025. The Interview Guys

  2. How many gig workers are there? Gig Economy Data Hub

  3. Interview with Loretta Worters, VP Media Relations. III

  4. Interview with Amanda Demanda. AD Injury Lawyers

  5. Self-employed people. Healthcare.gov