If you are thinking about driving for a ridesharing company like Uber or Lyft, you may be wondering what kind of insurance you need to protect yourself, and your passengers, in case of an accident. Ridesharing is a great way to earn some extra money, but it also comes with some additional risks and responsibilities. In this blog post, we will explain what rideshare insurance is, why you need it, how much it costs, and where to get it.
What Is Rideshare Insurance?
Rideshare insurance is a type of auto insurance that covers drivers who use their personal vehicles to provide ridesharing or delivery services. It is designed to fill in the gaps between the driver’s personal auto insurance and the coverage provided by the rideshare company.
Rideshare drivers may need this coverage because their personal auto insurance may not cover them while they are working for a rideshare company. Rideshare insurance can help cover vehicle damage and accidents that occur while the driver is waiting for, picking up or dropping off a rider.
Rideshare insurance is a relatively new form of auto insurance, and the offerings from different insurers can vary dramatically. Most insurers offer some form of rideshare insurance as an endorsement to your existing personal policy, while others simply offer it as a separate policy. Some insurers may not offer rideshare insurance at all, or only in certain states.
Why Do You Need Rideshare Insurance?
You need rideshare insurance to avoid gaps in your coverage and potential financial losses if you get into an accident while driving for a rideshare company. Here are some reasons why you need rideshare insurance:
- Your personal auto insurance may not cover you while you are driving for a rideshare company. Most personal auto policies do not allow you to use your vehicle for business purposes, and may exclude or limit coverage for ridesharing activities. If you get into an accident while driving for a rideshare company, your personal insurer may deny your claim or cancel your policy if they find out you have not disclosed your ridesharing activity.
- Your rideshare company’s insurance may not cover you at all times or for all damages. Rideshare companies like Uber and Lyft provide some insurance coverage for their drivers, but it depends on the stage of the trip and the level of coverage.
There are three stages of a trip:
- Stage 1: You have the app on and are waiting for a ride request.
- Stage 2: You have accepted a ride request and are on your way to pick up the rider.
- Stage 3: You have picked up the rider and are transporting them to their destination.
During stage 1, your rideshare company’s insurance provides minimal coverage for liability only, which means it only covers the damages or injuries you cause to others, not to yourself or your vehicle. During stages 2 and 3, your rideshare company’s insurance provides more comprehensive coverage for liability, comprehensive, collision and uninsured/underinsured motorist. Keep in mind, this coverage may have deductibles, limits, or exclusions that may not fully cover your expenses or losses. (For example, Uber’s deductible for comprehensive and collision coverage is $1,000, which means you have to pay $1,000 out of pocket before Uber’s insurance kicks in. Lyft’s deductible is $2,500, which is even higher. Additionally, Uber and Lyft’s liability limits vary by state and may not be enough to cover the medical bills or property damage of multiple parties involved in a serious accident.)
- Rideshare insurance can fill in the gaps and provide extra protection. By adding rideshare insurance to your personal policy, you can gain coverage for the times when your personal policy does not apply (stage 1) or when your rideshare company’s policy does not fully cover you (stages 2 and 3). Rideshare insurance may also extend some of your personal policy’s coverages to your ridesharing activities, such as personal injury protection/medical payments, roadside assistance and rental car reimbursement.
How Much Does Rideshare Insurance Cost?
The cost of rideshare insurance depends on several factors, such as:
- Your insurer: Different insurers have different rates and discounts for rideshare insurance. Some insurers may charge more than others for the same level of coverage.
- Your location: The state and city where you live and drive can affect your rates. Some states have higher insurance costs than others due to factors like traffic, weather, crime, and regulations.
- Your vehicle: The make, model, year and condition of your vehicle can influence your rates. Typically, newer, more expensive, and more powerful vehicles cost more to insure than older, cheaper, and less powerful models.
- Your driving history: Your driving record, claims history, and credit score can affect your rates. Generally, drivers with fewer accidents, violations, claims, and higher credit scores will pay less than drivers with more activity in their driving history.
- Your coverage: The amount and type of coverage you choose can affect your rates. As always, higher coverage limits and lower deductibles and will cost more than lower limits and higher deductible options.
According to NerdWallet, the average cost of rideshare insurance is about $15 to $20 per month. However, this is just an estimate, and your actual cost may vary depending on your insurer and other factors. To get an accurate quote, you should compare rates from different insurers and choose the one that offers the best value for your needs and budget.
Where Can You Get Rideshare Insurance?
Not all insurers offer rideshare insurance, and some may only offer it in certain states. You should check with your current insurer first to see if they offer rideshare insurance and how much it would cost to add it to your existing policy. If your current insurer does not offer rideshare insurance or if you are not satisfied with their rates or coverage, you should shop around and compare quotes from other insurers carriers.
Some of the major insurers that offer rideshare insurance include:
- Progressive: Progressive offers rideshare insurance as an endorsement or add-on to your personal policy. It covers you during all stages of a trip and extends some of your personal policy’s coverages to your ridesharing activities. Progressive’s rideshare insurance is available in 35 states.
- Geico: Geico offers rideshare insurance as a separate policy that replaces your personal policy. It covers you during all stages of a trip and includes the same coverages as a standard personal policy plus some extra benefits like emergency roadside service. Geico’s rideshare insurance is available in 40 states.
- State Farm: State Farm offers rideshare insurance as an endorsement or add-on to your personal policy. It covers you during all stages of a trip and extends some of your personal policy’s coverages to your ridesharing activities. State Farm’s rideshare insurance is available in 46 states.
- Allstate: Allstate offers rideshare insurance as an endorsement or add-on to your personal policy. It covers you during all stages of a trip and extends some of your personal policy’s coverages to your ridesharing activities. Allstate’s rideshare insurance is available in 47 states.
You can find more insurers that offer rideshare insurance by using online tools or contact one of our agents to compare rates and coverages from different providers.
Rideshare insurance is a type of auto insurance that covers drivers who utilize their personal vehicles for ridesharing or delivery services. It is designed to fill in the gaps between the driver’s personal auto insurance and the coverage provided by the rideshare company.
Rideshare drivers need this coverage because their personal auto insurance may not cover them while they are working for a rideshare company, and their rideshare company’s insurance may not cover them at all times or for all damages.
Rideshare insurance can cost anywhere from $15 to $20 per month on average, depending on the insurer and other factors. It is an inexpensive way to provide extra protection and peace of mind for rideshare drivers who want to avoid gaps in their coverage, and potential financial losses, if they get into an accident while driving for a rideshare company.
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