Why Rideshare Drivers Need Car Insurance

why rideshare drivers need car insurance

Hybrid car insurance for rideshare drivers, in addition to rideshare companies’ coverage, is the ideal option for a driver to be completely covered while on the job. Commonly known as rideshare insurance, these hybrid policies cover rideshare drivers for the times they are using their cars for personal purposes and when they are logged in to a rideshare app but not eligible for coverage under the rideshare company's insurance. Drivers for app-based delivery services also require rideshare insurance to prevent a coverage gap. 

Why Is Car Insurance A Must-Have For Rideshare Drivers? 

A driver requires rideshare insurance when he or she drives to generate income. This applies whether he or she drives for ridesharing services like Uber or Lyft or on-demand delivery companies like Instacart, Grubhub, and Instacart. 

A personal auto policy is less likely to cover any accidents or personal injuries that occur during a driver’s ridesharing gig. The policy provider could even revoke the coverage if it discovers that the driver hasn’t revealed that he or she drives the car to generate money. Even if the driver is covered by his or her rideshare company, that coverage won’t cover him or her the whole time he or she is on the job. 

Lyft And Uber Insurance 

These ridesharing companies offer partial coverage during Period 1, where the driver has turned the app on and is waiting for a passenger to request a ride. Full coverage takes effect once he or she has accepted a ride and is carrying passengers. The following are common rideshare insurance periods: 

Period 0: The rideshare app is deactivated. The driver’s personal auto coverage applies. 

Period 1: The rideshare app is activated in anticipation of a ride request. The driver’s personal auto policy doesn’t apply unless it’s accompanied by rideshare insurance. His or her rideshare employer’s policy provides only liability coverage in this situation. 

Period 2: Ride request accepted and the driver is driving towards a passenger. His or her Uber or Lyft coverage takes full effect. 

Period 3: The driver has picked up passengers and is driving them to their destinations. His or her rideshare employer’s policy takes full effect. If the driver gets into an Uber accident, his or her 

Uber insurance will cover both personal injuries and property damages. Uber insurance policy and Lyft policy are nearly the same. They only differ when it comes to comprehensive and collision insurance’s deductible amounts. A deductible is generally the driver’s share of repair expenses before his or her insurer takes care of the remaining part of the claim. The deductible amount for Uber is $1,000, while that for Lyft is $2,500. 

Who Are The Providers Of Rideshare Insurance? 

A driver can buy rideshare insurance from any of the top auto insurers in the United States. These insurers include Farmers, Geico, Allstate, USAA, and Progressive. Unfortunately, providers of rideshare insurance aren’t available in every state. If a driver can’t get rideshare insurance, he or she should obtain a commercial insurance policy to ensure full coverage in all situations. 

What Is The Average Cost Of Rideshare Insurance? 

Some reputable insurers’ websites say the average cost of rideshare insurance is $15 per month, while others say it's way cheaper than that. Allstate, for instance, says the coverage can cost as low as $20 a month. USAA charges around $6 per month. The USAA rideshare insurance is, however, offered to veterans, military personnel, and their families.

The Lean Startup Life Media Network Newest Blog Posts: