As a rideshare driver, having insurance can be crucial. Accidents can happen on the road, and if you're not properly insured, you may face significant financial or legal consequences. Here, we'll walk through what rideshare car insurance is, why you might need it, what Uber and Lyft may cover, and what Infinity Insurance Agency, Inc. can offer.
Rideshare insurance basics
Driving for a rideshare service like Uber or Lyft can be a great way to earn extra income, but it also comes with risks. When you drive longer hours for work, the potential for accidents and damage may increase. While personal auto insurance can cover you during trips like running errands or commuting, it may not provide coverage when you're using your vehicle for work-related purposes. This is where having insurance that’s tailored to your work as a rideshare driver may come in handy.
Without the right coverage, you could end up paying for vehicle damage, medical bills, and legal expenses out of your own pocket, which could leave you financially vulnerable. Having rideshare insurance may help you avoid financial distress from specific circumstances.
Do I need rideshare car insurance?
If you already have personal car insurance, it typically won’t cover you when you’re driving for rideshare purposes. So, if you’re driving for Uber or Lyft, rideshare car insurance can help cover accidents that arise while you’re working under certain conditions.
Rideshare companies like Uber and Lyft can provide some insurance coverage, but it may only cover accidents when a passenger is in the vehicle. There might also be lapses in coverage for injuries or damages that exceed Lyft or Uber’s insurance limits. This may make it important for drivers to add rideshare insurance to their personal auto policy that may extend past these apps’ constraints.
Rideshare insurance can come from an auto insurance policy or an endorsement. A car insurance endorsement simply means a change or addition to your existing policy. Common endorsements like roadside assistance may be added to your policy but typically for an additional cost.
Lyft and Uber insurance requirements
Both Uber and Lyft have specific insurance requirements for their drivers. Before operating a rideshare vehicle, it can be important to understand how their insurance policies work:
- Uber insurance: During active rides with passengers, Uber’s insurance typically consists of collision, liability, and uninsured motorist coverage. When the driver is working but without a passenger, liability coverage may be the only coverage applicable but to a limited extent.
- Lyft insurance: Similar to Uber, Lyft offers collision, liability, and uninsured motorist coverage for drivers with passengers. Depending on if you’re in the drop-off, pick-up, or passenger stage may determine what coverages can be utilized.
How rideshare car insurance works for Lyft and Uber
Rideshare insurance provided by Lyft or Uber may help address the specific needs of drivers working for those companies. Their coverage works in phases based on your status within the app:
Phase 1, app on, waiting for a ride request
When you have the app on but haven’t yet accepted a ride request, your personal auto insurance may not cover any damages to your or a third party’s vehicle if you're in an accident. At this point, Uber or Lyft provides limited liability insurance to help cover damages to another vehicle. However, this coverage doesn’t extend to your own vehicle or injuries.
Phase 2, ride accepted, picking up passenger
Once you've accepted a ride and are driving to pick someone up, both Uber and Lyft typically provide more coverage. This can include liability, collision, and uninsured motorist coverage, but again, it may not fully cover vehicle damages to your car or medical costs.
Phase 3, passenger in the vehicle
This is when you’re driving the passenger to their destination. At this stage, Uber and Lyft can offer liability, collision, and uninsured motorist coverage. However, your own vehicle damage may not be covered in certain circumstances.
Types of coverage in a rideshare car insurance policy
Purchasing rideshare insurance can help you navigate scenarios where Lyft and Uber’s policies won’t kick in. Though additional coverage may be helpful, it’s important to note that auto insurance providers that offer rideshare insurance may only help cover phase 1 situations. If you’re looking to add rideshare insurance to your personal auto policy, this insurance may consist of several types of coverage. This can include:
- Liability coverage: This may cover damage you cause to another vehicle or driver in an accident.
- Collision coverage: This can help pay for damages to your own vehicle during an accident, regardless of who’s at fault.
- Comprehensive coverage: This coverage can help pay for damages from non-collision events, like vandalism or weather-related damage.
- Uninsured/underinsured motorist coverage: This insurance may cover damages to your vehicle sustained by another at-fault driver who doesn't have insurance or has insufficient coverage.
- Medical payments (MedPay) or personal injury protection (PIP): MedPay can help cover medical costs for you and your passengers during an accident. PIP may cover some of your lost wages if you’re unable to work after an accident as well as certain medical expenses.
How much does rideshare insurance cost?
The cost of adding rideshare coverage to your existing personal auto insurance policy may vary depending on several factors, including your location, driving history, and the insurance provider you choose. While it’s an additional expense, this coverage may help you avoid more substantial costs from damages that Uber or Lyft insurance won’t pay for.
Benefits of having rideshare insurance
Rideshare insurance can help provide a couple of important benefits:
- Financial help: Rideshare insurance may help prevent excessive costs from accidents and medical bills for covered accidents.
- Avoid policy cancellations: Without proper coverage, your personal auto insurance provider may cancel your policy if they find out you're using your car for ridesharing without notifying them. Though purchasing additional rideshare insurance is not required, it may help you remain compliant with both your personal insurance policy and the rideshare platform’s requirements.
What to do if you're in an accident
If you're involved in an accident while driving for Uber or Lyft, following these steps may help you:
- Take injury precautions: Check yourself for injuries and ask others, including your passengers, if they think they are hurt. Even if everyone feels fine, it still may be important to call emergency services.
- Contact police: If there is damage to your or a third party’s car, you may want to contact the police. Depending on what state you live in, it may be required for you to report the accident to police if there is significant damage or somebody is hurt.
- Document the scene: After checking for injuries, you can take photos of the damage, exchange information with the other party, and notify the rideshare company.
- Contact your insurer: Finally, you may want to report the accident to the rideshare insurance provider and your personal insurance company.
Rideshare insurance can be helpful for people who drive for Uber or Lyft. Adding this coverage to your existing personal auto policy may help fill the gaps of the insurance provided by your ride sharing company.
If you work for Uber or Lyft, it may be important to read the insurance qualifications on the respective website and call Uber or Lyft if you have questions about the coverage they offer. To ask about additional rideshare coverage or get a free personalized quote, you can call Infinity Insurance Agency, Inc. at 1-855-478-4705.