Rideshare Insurance: Do You Need It?

Key Points:

• Having rideshare insurance ensures your insurance company won’t deny your claim for an accident while using the app.
• Standard insurance doesn’t cover the period when you’re waiting to accept a delivery or trip on a rideshare app.
• Most major insurance companies allow you to add rideshare insurance by calling an agent.

Driving for a company like Lyft or Uber can be a great gig to make extra cash, but you’ll want to check that you’re insured before you pick up your first passenger or make your first delivery. The company you drive for may offer some coverage, but rideshare insurance works to fill in the gaps between this and your personal auto insurance policy.

In this article, we’ll discuss how rideshare insurance works, who offers rideshare policies, and what happens if you get into an accident on the job. We have also reviewed the best car insurance companies in the industry and will give our recommendations for top providers that offer rideshare insurance.

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What Is Rideshare Insurance?

Rideshare insurance is coverage for motorists who are employed by transportation network companies (TNCs) like Uber, Lyft or other on-demand delivery services. It’s a coverage option that is designed to fill in gaps between the coverage provided by the TNC and a driver’s personal auto insurance.

If you are a rideshare driver and are in a collision while on the job, your personal car insurance may not cover the damage. This is because a personal car insurance policy typically excludes a vehicle if it is being used for business. In fact, not informing your insurer you drive for a rideshare service could result in you being dropped by your provider.

TNCs offer auto insurance coverage only during certain periods of work, such as when you have a rider in your vehicle. However, if you want more protection, you’ll need to get rideshare insurance.

Rideshare Insurance Vs. Commercial Insurance

Something to note about rideshare coverage is that availability varies from state to state. If you can’t purchase a rideshare policy, you may have to get commercial insurance.

Commercial insurance is geared toward people who use their car for more than just the commute to work. Those who qualify for this type of auto coverage are people like pizza delivery drivers, employees who drive long distances to meet with clients or survey job sites, or those who transport tools and needed equipment to work.

These types of policies are usually more expensive than traditional auto insurance because drivers need higher liability limits in the case of damaged property or injuries when transporting goods or passengers.

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Do You Need Rideshare Insurance?

While rideshare companies and food delivery apps may not require you to carry rideshare insurance, they will require you to have the base amount of liability car insurance needed in your area. After that, drivers should review their personal insurance policies and what’s covered by the TNC to determine gaps in coverage. Buying a rideshare policy will be considered an add-on to your existing coverage.

Because the rideshare company’s coverage is only meant to cover drivers while they’re on the job, there are different phases for coverage. For example, Uber and Lyft cover damages up to $1 million, minus your deductible, if you have passengers in the car or if you’re en route to pick up a rider.

If you’re awaiting a ride request, both companies offer third-party liability coverage up to $50,000 in bodily injury liability per person, $100,000 in bodily injury liability per accident, and $25,000 in property damage per accident.

Here’s a further breakdown:

*May vary by your state’s minimum liability policy limits.
**Only eligible if you have personal collision and comprehensive insurance.

Lyft and Uber insurance policies are nearly identical. Uber even raised its car insurance deductible for collision insurance and comprehensive insurance from $1,000 to $2,500 in March 2021 to match Lyft. $2,500 is a large deductible. You might have a $500 or $1,000 deductible on your insurance policy. Rideshare insurance can help cover the difference in deductible in this situation.

Depending on the TNC, the main gap rideshare insurance fills is when your app is on and you’re waiting for a ride request. The company may provide liability insurance during this time, but you’re on your own when it comes to collision coverage and comprehensive coverage.

So, it’s a good idea to have full coverage with a rideshare insurance add-on. Adding rideshare insurance can also help you pay for medical costs and damage to your vehicle if you find the rideshare company’s deductibles are too high.

Meal Delivery Drivers

While Lyft and Uber drivers are obvious candidates for rideshare coverage, drivers for delivery app companies like Instacart and Grubhub can find themselves with similar coverage gaps if they’re not properly insured.

Here are a few examples of how popular food delivery apps handle insurance coverage:

• Uber Eats: Offers similar coverage for both its rideshare drivers and delivery drivers.
• Postmates: Provides coverage once a request has been accepted and a driver is en route to the delivery, as well as when the delivery is being made.
• DoorDash: Coverage begins only after a driver has picked up an order and has the delivery in the vehicle.
• Instacart and Grubhub: Insurance is entirely left up to the driver’s personal coverage policies.

You can check with your personal insurer to see whether you’d be covered while working for any of these services.

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How To Purchase Rideshare Insurance

As mentioned, rideshare insurance is considered supplementary coverage that can be added to your existing personal auto insurance policy. It’s also not sold as an individual insurance product, so you’ll have to buy it from your current insurance provider.

After signing up to be a rideshare driver, the first thing you should do is notify your insurance provider that you’re working for a TNC. Then, assess the gaps between your personal auto policy and the coverage your employer provides. If your current insurer doesn’t have rideshare insurance, see if it offers commercial coverage instead.

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What Happens If You’re In An Accident On The Job?

As stated above, if you get into a wreck while driving for a rideshare company or delivery app, the level of coverage you get is going to depend on the stage of work.

Regardless of whether you are driving for a company at the time of a collision, the first thing you should do is call law enforcement. An officer can assess the severity of the crash and make sure the medical needs of those involved are being met.

You might be asked to provide proof of insurance, either your personal policy or coverage from the rideshare company. This is also the time to exchange insurance information with any other drivers or passengers involved.

The next thing to do is alert your insurance provider you’ve been in an accident. Whether your provider or the rideshare company covers the damage will depend on what phase of work the accident occurred in, but your insurer will still want to keep a record of your recent driving history.

You should also notify the rideshare company or delivery app to file a claim if you qualify for the company’s coverage.

What If You Don’t Tell Your Insurance About Ridesharing?

Ridesharing changes your risk in the eyes of insurance companies since you’re on the road often for your job and therefore more likely to get into an accident than the average driver. Telling the company can increase your rate, but that’s part of the cost of doing business as a rideshare driver.

If you don’t tell the company and you get into an accident, the company can deny your insurance claim if it finds out. The company can also drop you from coverage immediately, which leaves you as an uninsured driver unless you get another company that same day. This can cause a lapse in coverage and make your next insurance policy even more expensive.

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Rideshare Insurance: Our Take

At the end of the day, it’s a good idea to get a rideshare insurance policy if you drive regularly for Uber or Lyft. You’ll pay slightly higher rates, but you’ll be protected in any situation while on the app.

Our Recommendations For Rideshare Insurance

Rideshare insurance is an add-on policy that’s offered by most major insurers. We suggest checking if your current coverage provider offers rideshare insurance or commercial insurance.

If you’re looking to switch insurers to get a lower rate or if your current provider doesn’t have rideshare coverage, we recommend checking out State Farm and Geico.

State Farm: Best Overall Provider

State Farm offers rideshare insurance in all states. Once you have a policy, you can simply call an agent to add coverage. The company also has a few other perks that make it a good option, including its 25 percent student discount that lasts until you turn 25. State Farm offers all the standard coverage options plus some extras like roadside assistance.

Learn more in our State Farm insurance review.

Geico: Best For Basic Coverage

Geico is another reputable company that offers rideshare insurance. As with State Farm, you’ll have to reach out to a Geico agent to add the coverage. Geico stands out for offering 16 discounts that work for many different situations. The company also offers mechanical breakdown insurance, which is similar to extended warranty coverage for repairs.

Learn more in our Geico insurance review.

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Rideshare Insurance: FAQ

Below are a few frequently asked questions about rideshare insurance.

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How We Rate Auto Insurers

Our review team extensively researches auto insurance providers to deliver informed and unbiased assessments of leading companies. We evaluate several key rating factors that are important to consumers to determine which providers are the best in the industry:

• Reliability: It’s important that an auto insurer is able to meet its claims obligations. Companies with a strong financial strength rating from AM Best score best in this category. Established insurers with a long history of reliable service also receive positive marks.
• Availability: Insurance companies that offer wider availability to consumers in terms of state availability and few eligibility requirements are more likely to meet consumer needs.
• Coverage: To determine our coverage score, we look at the number of coverage options available as well as coverage limits and deductible options. Our ratings also take into account additional services and benefits like roadside assistance.
• Pricing: Cost can be difficult to compare between insurers because so many factors impact annual premiums. The cheapest insurer for one driver may not be the cheapest for another. To determine our cost score, we look at insurance rate estimates generated by Quadrant Information Services, discount opportunities, and consumer reports.
• Service: We comb through customer reviews on sites like the Better Business Bureau (BBB) to learn about customer experiences. Insurers with a low volume of complaints score well in this area. We also consider the claims process, giving higher ratings to car insurance providers that offer a smooth experience.
• Technology: Providers with an online quote tool, easy-to-use claims app and a usage-based insurance app score best in this category.

*Data accurate at time of publication.

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