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If you have a work gig driving for a company like Uber or Lyft, rideshare insurance can provide critical coverage if you get into a car accident. While rideshare companies offer some coverage, it could be woefully inadequate and you could be faced with paying out of pocket for steep car repair and medical bills.
Rideshare insurance is a good choice for a driver who wants to bridge the gap between their personal car insurance and the coverage offered by rideshare companies. So before you turn on your rideshare app and pick up a passenger, here’s what you need to know.
The Stages of Rideshare Driving
To understand the insurance for rideshare driving, it’s important to know the three phases while a rideshare app is on:
- Available: The driver is available to pick up a passenger.
- En route: The driver has accepted a ride and is on the way to pick up the passenger.
- On the trip: The driver has picked up the passenger and is on the way to the passenger’s destination.
When an Uber or Lyft rideshare app is off, your personal auto insurance applies. Once your rideshare app is on, Uber and Lyft provide some coverage. Knowing the gaps between that coverage is key to making sure you are properly protected. Here’s a breakdown of the three driving periods and what Uber and Lyft cover.
| Driving period | Uber | Lyft |
|---|---|---|
App is on; waiting for ride request | Third-party liability coverage if your personal auto insurance doesn’t apply • $50,000 in bodily injury coverage per person • $100,000 in bodily injury coverage per accident • $25,000 in property damage coverage per accident | Third-party liability coverage if your personal auto insurance doesn’t apply • $50,000 in bodily injury coverage per person •$100,000 in bodily injury coverage per accident • $25,000 in property damage coverage per accident |
App is on; heading to pick up passenger | • $1 million third-party liability coverage • Uninsured/underinsured motorist bodily injury coverage • Contingent comprehensive and collision coverage up to actual cash value of car with $1,000 deductible | • $1 million liability coverage • Uninsured/underinsured motorist bodily injury and/or first-party coverage • Contingent comprehensive and collision coverage up to actual cash value of car with $2,500 deductible |
App is on; passenger picked up; driver traveling to passenger’s destination | • $1 million liability coverage • Uninsured/underinsured motorist bodily injury coverage • Contingent comprehensive and collision coverage; up to actual cash value of car with $1,000 deductible | • $1 million liability coverage • Uninsured/underinsured motorist bodily injury and/or first-party coverage • Contingent comprehensive and collision coverage up to actual cash value of car with $2,500 deductible |
Breaking Down Coverage
Now, you might be wondering what some of those terms mean. Here are definitions related to insurance for drivers provided by rideshare companies.
Third-party liability coverage
This pays for bodily injury and property damage caused to a third party from a car accident. A third party is someone or something other than the driver or their vehicle. For example, if a rideshare driver rear-ends another car, auto liability insurance pays the other driver.
Uninsured/underinsured motorist bodily injury coverage
This coverage pays for injuries suffered by a rideshare driver and their riders if a car accident happens during a rideshare trip and another driver is at fault who doesn’t have sufficient insurance. This coverage also might apply in the case of a hit-and-run accident.
The coverage limits provided by the rideshare insurance company will vary by state.
Contingent collision and comprehensive coverage
If you carry comprehensive and collision coverage on a personal auto insurance policy, the rideshare company provides collision and comprehensive coverage during the time you’re going to pick up a rider or have a rider. A deductible (which can be substantial) reduces a claim payment for these coverages.
If you don’t carry collision and comprehensive coverage on your vehicle, Uber and Lyft won’t provide it either.
Does My Personal Car Insurance Policy Cover Rideshare Driving?
Personal auto coverage typically excludes rideshare trips. That’s because your auto insurance company has priced the policy assuming you’re driving yourself, relatives and/or friends, and that you aren’t earning money from driving and putting a lot of extra miles on your car.
As a result, a rideshare driver’s personal auto policy typically won’t supply coverage while you’re “at work.”
Many insurers now offer rideshare insurance, including Allstate, Farmers, Liberty Mutual, Progressive, State Farm and USAA.
Minding the Gap
A rideshare driver might be happy with the insurance provided by the rideshare company, especially if the driver carries only the minimum personal auto insurance required by the state. In those cases, a million dollars in liability coverage from Uber can look like a major bonus.
But there can still be gaps, which is where rideshare insurance comes in. For example, rideshare companies don’t typically provide collision or comprehensive insurance when the app is on and you’re waiting for a ride request. And a personal auto policy that includes collision and comprehensive likely won’t cover that period. So if you accidentally back into a pole, you’d have no insurance for the damage.
“Without additional rideshare coverage from their personal auto insurer, drivers may find their existing coverage may not apply to a loss that occurs while they are acting as a rideshare driver,” says Luis Sahagun, a spokesperson for Farmers Insurance.
In some states, a rideshare driver might be able to buy a rideshare endorsement, or add-on, for a personal auto insurance policy. This endorsement can help fill gaps between the rideshare company’s coverage and a driver’s personal coverage. For instance, a rideshare endorsement may pay the $500 difference between a rideshare company’s $1,000 deductible for collision coverage and a $500 deductible for the driver’s own collision coverage.
Insurance Companies That Offer Rideshare Insurance
Here are insurance companies that offer rideshare insurance coverage, the policy types and what’s covered by each policy.
Keep in mind, rideshare insurance might not be available in every state and what’s covered could vary by state. It’s a good idea to speak with your insurance agent to make sure you understand what’s specifically covered by your policy.
| Company | Product name | Policy types | What's covered? |
|---|---|---|---|
| Allstate | Allstate Ride for Hire | Policy endorsement | Covers when you are waiting for a ride request; helps pay the rideshare company’s deductible of up to $2,500 when en route or on the trip |
| American Family | American Family Rideshare Endorsement | Policy endorsement | Covers when the app is on and waiting for a ride request |
Erie | N/A | Available to drivers who put business use designation on auto policy | Covers each part of trip |
| Farmers | Farmers Rideshare | Policy endorsement | Covers when the app is on and waiting for a ride request |
| Mercury | N/A | Policy endorsement | Covers when the app is on and waiting for a ride to be request |
| Progressive | N/A | Policy endorsement or driver must get commercial policy depending on the state | Coverage depends on your state and policy |
State Farm | N/A | Policy endorsement | Covers when app is on and waiting for a ride request; also covers when transporting a rider (except liability coverage) |
Travelers | N/A | Policy endorsement | Covers when app is on and waiting for a ride request (currently only available in CO and IL) |
USAA | Rideshare Gap Coverage | Policy endorsement | Covers when app is on and waiting for a ride request |
The cost of a rideshare endorsement or insurance policy varies among companies. State Farm says its rideshare insurance endorsement typically adds 15% to 20% to the policyholder’s premium. USAA says its rideshare add-on costs as little as $6 a month.
“I highly recommend that all rideshare drivers have rideshare insurance,” says former rideshare driver Harry Campbell, founder and owner of The Rideshare Guy blog and podcast.
Featured Car Insurance Partners
1
Travelers
Average annual rate for good drivers
$1,435
Average annual rate for drivers with a speeding ticket
$1,828
Complaint level
Very Low
2
USAA
Average annual rate for good drivers
$1,141
Average annual rate for drivers with a speeding ticket
$1,381
Complaint level
OK
3
State Farm
Average annual rate for good drivers
$1,402
Average annual rate for drivers with a speeding ticket
$1,607
Complaint level
Low
What Happens if You Hide Your Driving Gig?
Failing to divulge to your insurance company that you’re a rideshare driver could lead to negative consequences, says Loretta Worters, a spokesperson for the Insurance Information Institute, an industry trade group.
For instance, an insurer might reject a claim for damage a rideshare driver’s vehicle sustains in a crash if the driver doesn’t have a rideshare policy or rideshare endorsement. Or the insurer might drop the driver as a customer.
“This could be financially devastating to someone who is driving for business and has no financial protection,” Worters says.
Sahagun says Farmers relies on its customers to report when they’ve decided to become a rideshare driver since the insurer has no other way to gather that information. So it falls on rideshare drivers to know what actions are needed to get the right protections while working.
FAQs
Rideshare Insurance: Do You Need It If You’re An Uber or Lyft Driver? ›
If you consider driving for companies such as Uber, Lyft, DoorDash, Grubhub, Postmates, Uber Eats, Instacart, or other delivery-type companies, you want a rideshare insurance endorsement. Many variables come into play when an insurance company determines the premium.
How much does Uber spend on insurance? ›10% of gross bookings is a reasonable estimate for Uber's insurance costs based on 2017 figures. This would suggest Uber spends a whopping 4.8 billion in insurance annually. Is Uber really getting its money's worth for close to 5 billion dollars a year in insurance? Probably.
What is the difference between Uber and Lyft for riders? ›Availability In Areas
While Lyft is slowly expanding, Uber has a higher coverage area than Lyft. Lyft is a great choice in times of high demand or when there is a driver nearby and you need a low cost ride fast. If you need a ride that looks good, Uber has a better selection of vehicles.
Your name must be on the policy, or else the ride-share service might not let you sign up. Keep in mind your personal auto insurance won't cover any accidents that happen while you're logged into the app or with a passenger.
Is Uber injury protection worth it? ›Whether the program is worth the cost to you and your family might depend on the total hours that you dedicate to working with Uber. For instance, if you work full-time driving for Uber, you have a significantly greater risk of suffering an injury compared to someone who only drives for Uber less than 10 hours a week.
Does Uber have a $1 million insurance policy for accidents? ›Once the Uber driver accepts a ride request and is en route to pick up the passenger, the coverage increases significantly. During this period, Uber's insurance policy provides up to $1 million in liability coverage. This coverage is designed to protect both the driver and the passenger in the event of an accident.
How does Uber handle liability? ›After a driver accepts a ride request, Uber's $1,000,000 liability insurance policy kicks in to cover bodily injury, death, and property damage from any accidents the driver causes. During this time, the driver may be en route to pick up a passenger or transporting a passenger to their destination.
Who pays more Lyft or Uber? ›In terms of the hourly rate, Lyft is generally considered to pay slightly more than Uber. However, there is no set hourly rate for either app since drivers are paid instead on a piece-rate basis. As such, this is important to consider as part of your decision since the hourly rate will likely vary.
Why Uber pays more than Lyft? ›Uber vs Lyft: Earning Potential. According to nationwide data, Uber drivers typically make more on average than Lyft drivers. One reason why Uber drivers typically earn a bit more is that they tend to spend more time on the road. According to Gridwise, there's a 4% difference in trips per hour between Uber and Lyft.
Who pays more Uber or DoorDash? ›The combination of Uber Eats' base pay and tips comes in 25% to 33% lower than DoorDash.
Do Uber drivers have to say your name? ›
Remember, all an Uber has to work with is the name supplied on the rider's account. Asking for this name allows them to verify that they're picking up the right person and steer clear of circumstances like the ones that make the all-too-common “say my name” scam possible.
Do you have to give Uber your real name? ›Uber will conduct a large audit of rider account names and freeze any accounts with clearly fake names. Riders will have to update or validate their account names with Uber's support agents to have their accounts unblocked, the company said.
Are you insured as an Uber passenger? ›Drivers, passengers, and third parties are all covered by Uber insurance. In addition, both ridesharing firms offer varying degrees of coverage when a driver is waiting for a fare, on the way to pick up a ride, or actively transporting a paying passenger.
Does Uber give your money when your in an accident? ›Uber will pay for a Uber passenger's personal injury claim so long as there is not another liable driver who should pay first. Before making a claim against Uber's UM coverage, the Uber passenger will need to make a claim against the other car's bodily injury liability coverage.
Is driving for Uber worth the wear and tear on my car? ›Cars Wear and Tear Costs
You'll likely need oil changes, new brake pads, and tires more often than if you drove your car only for personal use. Find a reputable but affordable mechanic in the area to make the most of your business.
Uber maintains commercial auto insurance in case of a covered accident, including at least $1 million in liability insurance on behalf of drivers and delivery people once a ride is accepted.
Is Uber Eats insurance worth it? ›While Uber Eats provides some insurance, which is actually a legal requirement, this coverage assistance does not replace your personal insurance. So, even though Uber Eats insurance is actually one of the best in the ridesharing and on-demand delivery industry, it can still leave you with gaps in coverage.
Does Uber package have insurance? ›What happens if the package is damaged during delivery? Uber does not maintain insurance coverage for package loss, theft, or damage caused by a third party. Please see the Terms and Conditions for full details. Violation of the Terms and Conditions may result in deactivation of your account without notice.
Does Uber provide life insurance? ›Health, life, and disability
Where it is not applicable, we offer an allowance to support your medical insurance costs. Uber also provides life and disability insurance for all eligible employees.