Getting into an accident is one of the biggest, costliest risks for an Uber/Lyft driver. If you drive for them it makes sense to know what is and what is not covered.
Some drivers are mistaken to think Uber and Lyft provide insurance while driving. But that is wrong. There are restrictions and limits and you may not be completely covered.
Why do you need rideshare insurance?
- Did you know that if you get into an accident that was your fault, before a passenger is picked up, Uber will NOT pay for your automobile damage? They will pay for your liability to another person or property (up to $50,000 per person for bodily injury or up to $25,000 for property damage). But NOTHING to you.
- If you’re driving to/from an Uber shift without a passenger and get into an accident your automobile might sustain $7,000 worth of damage and you might be injured with $20,000 worth of medical bills and Uber would NOT pay. And your insurer would refuse to pay because you were driving for paid work.
This is why rideshare insurance, purchased from your personal insurance provider, is a necessity for Uber and Lyft drivers. It will legally, for a small additional fee, ensure that you are covered the ENTIRE time you are driving for Uber/Lyft.
What is Rideshare Insurance?
“Rideshare insurance,” is an additional policy with a fee added onto your personal auto insurance policy. It provides an Uber/Lyft driver with accident protection, including property damage and/or bodily injury.
Uber and Lyft drivers will only be fully insured, at all times, if they purchased rideshare insurance from their personal policy provider
- If you begin your Uber or Lyft shift and did not purchase rideshare insurance, you might get into an accident before you have a fare, and have your claim denied by your own insurance provider.
- Car insurers do not allow use of cars for commercial work unless the driver has informed their insurer first and paid for a policy specifically tailored to commercial drivers.
- Most car insurers have started asking all accident claimants if “they were working for Uber or Lyft.”
The honest, practical and safe strategy is to buy your own rideshare insurance when you start to drive for Uber or Lyft. You are protecting yourself, your assets and your well being, even though you may resent paying an additional rideshare insurance premium.
How Does Rideshare Insurance Work?
When you are properly insured, you get into your car to begin your Uber/Lyft shift, and a countdown of insurance coverage kicks in:
Rideshare Insurance Breakdown:
|0||Offline: Your Personal Policy|
|1||Online WITHOUT ride request: Rideshare Insurance + Lyft/Uber Policy|
|2||Online: WITH ride request but BEFORE rider on board: Lyft/Uber Policy|
|3||Online: AFTER rider is on board: Lyft/Uber Policy|
What Happens if You Don’t Have Rideshare Insurance?
The most dangerous part for an Uber or Lyft driver who does not have Rideshare insurance is the minute you pull out of your driveway and onto the road (Periods 0 +1).
- You risk having no coverage for your vehicle if you get into an accident because you are technically working for Uber or Lyft but you are not operating your car under the “non-commercial” terms your own personal insurer demands.
- During Periods 0 + 1, Uber and Lyft offer only liability protection for other vehicles or passengers. But your own vehicle has no protection.
- Your personal auto insurer may even cancel your entire policy if you had an accident while driving for a rideshare company.
- Rideshare insurance, purchased from your own provider, extends your personal auto policy to cover your vehicle when you drive for Uber/Lyft
How Much Does Rideshare Insurance Cost?
Rideshare insurance is an add-on to your traditional personal auto insurance policy. You cannot split up your car insurance. For example, you cannot have Farmers for your personal auto policy and buy Allstate rideshare insurance. Both have to come from one provider.
Costs vary, by state, and by insurer.
|Company||Cost Above Traditional Policy|
|Allstate||$15-$20 per year|
|Erie Insurance||$9-$15 per month|
|Mercury Insurance||$6 and up per month|
|Safeco||Mostly under $10 per month|
|State Farm||15%-20% of premium|
|USAA||Starting at $6 per month|
Where can you buy rideshare insurance?
|Insurer||States where insurer offers rideshare insurance|
|Allstate||AK, AL, AR, AZ, CA, CO, CT, DC, DE, GA, HI, IA, ID, IL, IN, KS, KY, LA, MA, MD, ME, MN, MO, MS, MT, NC, ND, NE, NH, NJ, NM, NV, OH, OK, OR, PA, RI, SC, SD, TN, TX, UT, VA, VT, WA, WI, WV, WY|
|Erie||DC, IL, IN, KY, MD, OH, PA, TN, VA, WI, WV|
|Farmers||AL, AR, AZ, CA, CO, GA, IA, ID, IL, IN, KS, MD, MI, MN, MO, MT, ND, NE, NJ, NM, NV, OH, OK, OR, PA, SD, TN, TX, UT, VA, WA, WI, WY|
|Geico||AL, AR, AZ, CA, CO, CT, DC, DE, FL, IA, ID, IL, IN, KS, LA, MA, MD, ME, MN, MO, MS, MT, ND, NE, NH, NM, OH, OK, OR, PA, RI, SC, SD, TN, VA, VT, WA, WI, WV, WY|
|Mercury||AZ, CA, GA, IL, NV, OK, TX|
|Progressive||AL, AR, AZ, CO, CT, DC, FL, GA, IA, ID, IL, IN, KY, LA, MA, ME, MI, MN, MO, MS, ND, NE, NM, OH, OK, PA, RI, SD, TN, TX, UT, VA, WA, WI, WV, WY|
|Safeco||AZ, CO, IL, IN, KS, MN, MS, OK, OR, TN, UT, WA, WI|
|State Farm||AL, AR, AZ, CA, CO, CT, DC, DE, FL, GA, IA, ID, IN, KS, KY, LA, MD, ME, MI, MN, MO, MS, MT, ND, NE, NH, NJ, NM, NV, OH, OK, OR, PA, SC, TN, TX, UT, VA, VT, WA, WI, WV, WY|
|USAA*||AL, AR, AZ, CA, CO, GA, DC DE, IA, ID, IL, IN, KS, KY, MA, MD, ME, MN, MO, MS, ND, NE, NH, NJ, NV, OH, OK, OR, TN, TX, UT, VT, WA, WV, WY|
Why do some drivers go without rideshare insurance? Cash flow is one reason. The average Uber driver in the US makes only $364 a month income.
The temptation to skip rideshare insurance to “save money” is strong. But is also stupid, dangerous and may cost you tens of thousands in accident costs.
What are the risks and the costs, for a person without ride insurance, who has an accident while beginning an Uber or Lyft shift?
- You are driving without a passenger. Then you are rear ended at a stoplight, and your car careens into a shop window, and you damage property, are injured, and your vehicle sustains major damage.
- You are on the hook for tens of thousands of dollars in your own auto repair and your own medical expenses.
- Uber’s rideshare policy does not take responsibility for any accident occurring before a passenger is picked up since drivers are considered ‘contractors’ and not ‘employees.’ If you get into an accident at that time, you will have to depend on your personal auto insurance for coverage. And that coverage probably will be denied if they find out you were working for Uber without rideshare insurance.
Accidents happen in seconds, you need rideshare insurance to protect against the unexpected.