Rideshare Insurance. What is it? Do you need it?
What Is Rideshare Insurance?
In its simplest terms, rideshare insurance is a specific policy that every ridesharing driver is legally obliged to get if they want to work with a transportation network company such as Uber or Lyft. Once you start working for these companies, personal auto insurance will not suffice as the vehicle is being used for business purposes.
While on the job, the only active coverage will be the commercial insurance provided by Uber & Lyft. This temporary coverage may offer less protection than you need (especially in between ridesharing trips), and may not adequately cover you, your vehicle, and your passengers in the event of an accident.
What is the Commercial Insurance Policy for Uber & Lyft?
The graphic below displays the commercial coverage Uber & Lyft provide to their drivers.
If you cause an accident while En Route or On Trip, both Uber and Lyft insurance policies will cover medical expenses and other damages you cause up to $1 million. The $1 million limit is much higher than most drivers — even taxi drivers in many major cities — carry in liability coverage. If you’re in an accident caused by a driver with not enough or no insurance, Uber’s insurance policy will cover your damage and injuries up to $1 million. If an uninsured or underinsured driver hits you while driving for Lyft, the amount its policy covers varies by state.
You can also draw on comprehensive and collision coverage from the ridesharing companies, but only if you also have such coverage on your personal policy. Beware, though: Deductibles can be high, and the policies apply only once you’ve accepted a ride request or while you’re carrying passengers.
If you cause an accident while you are offline, you will need to file a claim with your insurance provider unless your state law or rideshare insurance policy specifies otherwise. If the claim is denied or you’re not fully reimbursed, Lyft or Uber insurance will kick in. But ridesharing companies’ limits in these cases are relatively low — this is the “gap” that rideshare insurance from your personal carrier is designed to cover.
Why Do Uber & Lyft Drivers Need Rideshare Insurance?
The Uber & Lyft insurance policy has been a tricky issue for rideshare drivers ever since the inception of the company. Failing to get the correct insurance could prove to be a very pricy mistake, especially if the worst-case scenario happens.
Everyone who is on the road is taking a risk. That risk is amplified for Uber & Lyft drivers, for a few reasons:
- Their car is being used for commercial purposes.
- They are on the road longer, which increases the likelihood of an accident as they are more susceptible to fatigue.
- They are responsible for the safety of passengers and therefore liable for any medical expenses if an accident happens.
An accident while working with Uber or Lyft could leave drivers with astronomical bills for vehicle damages and medical expenses, not only for them but also for any other parties involved.
How to buy rideshare insurance
Note that rideshare insurance is either a hybrid policy or an add-on from your personal auto insurer, not stand-alone coverage. For example, you can’t have Progressive for your personal auto policy and buy rideshare insurance from Safeco.
When selecting rideshare insurance, be sure to:
- Tell VIG you’re driving for a ridesharing company.
- Figure out the gaps between your personal policy and the rideshare company’s policy. Uber and Lyft both provide $1 million in liability coverage for drivers carrying passengers. Among smaller and newer companies, policies can vary.
- Ask your current insurer or your VIG agent whether it offers rideshare insurance to fill in coverage gaps, or to quote you a commercial policy, if not.
What if my area doesn’t have rideshare insurance?
Rideshare policies aren’t available everywhere. If you can’t get rideshare coverage, you would need a commercial insurance policy to be fully insured and avoid being dropped by your carrier in the event of an accident. These plans have higher liability limits than a typical policy — and higher prices to match. According to insurance agent group Trusted Choice, the average commercial policy for a passenger car costs from $1,200 to $2,400 a year or more.
How much rideshare insurance costs?
A policy with ridesharing coverage can cost up to $15 more a month, according to insurers’ websites although some say it’s much cheaper. For example, Mercury Insurance Group has a starting rate of $6 per month and Safeco is about $10 a month. Liberty Mutual and Travelers Insurance rates are added to your existing premium and will vary from person to person.
How to report an accident and file a claim
Call the police. Whether or not your car accident happens while ridesharing, your first step should be to call the police. Depending on the type of accident and the rideshare company’s rules, you might have to provide your personal proof of insurance or the rideshare company’s certificate. Exchange information with the other driver as you normally would.
How to file: Inform your personal auto insurer and find out if you need to file a claim. Even if you can rely on Lyft or Uber to cover your damage, your personal insurer will find out about any accidents, and it’s best they hear it from you. Drivers who haven’t been honest about their driving status can find themselves in a tough situation: If you choose not to tell your insurer, you risk being dropped. Finally, notify your ridesharing company as well. If you can take advantage of the company’s coverage, a representative can help you start the claims process.
Some additional things to keep in mind- If there is no endorsement there would be no collision, comprehensive, or medical payments coverage. Keep in mind any acts such as delivery of pizza and food is not covered.
Come to VIG and find out more about Ride Share Insurance. #VIPwithVIG