Rideshare Insurance Options for Uber and Lyft Drivers

The rideshare industry has become a popular way for anyone with
a car to generate additional income or create a freestanding
career. In fact, full-time drivers
made around $36,525
on average in 2018. 

While the extra cash alone is enticing for many, it’s
important to consider all the factors before diving into a career
with Uber or Lyft. These rideshare companies provide drivers with
insurance coverage, but many drivers don’t realize that they
aren’t fully covered from the time they get in their car to the
time they hang up the keys. 

Rideshare insurance, typically purchased as an add-on to a
personal auto policy, can help to protect drivers from potential
gaps in coverage. However, rideshare insurance bridges these gaps
in coverage and keeps drivers protected even before they begin
their first trip. 

Table of Contents 

  1. What
    is Rideshare Insurance and Do I Need It?
  2. Rideshare
    Insurance Providers and Costs
  3. What if My
    Area Doesn’t Have Rideshare Insurance?
  4. How
    to Purchase Rideshare Insurance
  5. What
    Happens if I’m in an Accident While Driving for Uber or
    Lyft?

What is Rideshare Insurance and Do I Need It?

Rideshare insurance is a type of insurance coverage, typically
purchased in addition to a personal auto policy. When
driving for a rideshare company like Uber or Lyft, drivers may be
left uninsured during particular times of their drive. 

Rideshare companies divide the duration of a ride into three
phases or periods:

  • Period 0: The app is off and the driver is not logged
    in. A personal auto policy covers the driver. 
  • Period 1: The app is on and the driver is waiting for a
    request. Uber and Lyft offer limited liability coverage. Personal
    auto policy without rideshare insurance does not cover the driver.
    During this period, the driver may be without full coverage. 
  • Period 2: The driver has accepted a request from a
    passenger and is en route to pickup. Uber insurance and Lyft
    insurance provide full coverage. 
  • Period 3: The driver transports passengers from pickup
    to drop-off. Uber insurance and Lyft insurance provide full
    coverage. 

Uber and Lyft provide coverage for certain periods, but do not
provide full coverage for the entire duration of the drive. As a
result, a gap in coverage during Period 1 could leave drivers
vulnerable. Additionally, a personal auto policy does not provide
the necessary coverage to protect drivers in these coverage
gaps. 

Rideshare insurance purchased as an add-on to a personal auto
policy offers the protection drivers need during gaps in coverage,
particularly during Period 1. While Period 1 may be brief, a
collision during this window could be costly to an uninsured
driver.

While rideshare insurance covers the gap when drivers may be
unprotected, there are other benefits to purchasing a rideshare
insurance policy. Drivers may be able to write these expenses off
when filing their
taxes
, recover the cost of any property damaged in an accident,
and enjoy additional benefits provided by the company offering
rideshare insurance like roadside assistance, safe-driving
discounts, and insurance bundles. 

Rideshare Insurance Providers and Costs

Allstate


Allstate insurance
offers coverage for rideshare drivers with
their Allstate Ride for Hire policy. This policy is typically
$15–$20 per month. 

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 Insurance

Erie rideshare insurance puts a “business use” designation
on your personal auto insurance policy. This policy is $9–$15 per
month. 

DC, IL, IN, KY, MD, OH, PA, TN, VA, WI, WV

Farmers

Farmers rideshare insurance allows drivers to fill the coverage
gap when they are logged into the app but haven’t accepted a
ride. Since commercial use of a personal vehicle disqualifies the
standard insurance policy, Farmers allows you to add rideshare
insurance to this existing policy. The policy is around $150 per
month.  

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


Geico
offers rideshare insurance that takes the place of a
personal auto policy, meaning drivers can easily manage one policy,
rather than a personal auto policy and a rideshare add-on
policy . The policy is usually $150 per year. 

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 Insurance

Mercury rideshare insurance can be added on to a personal auto
policy and protects the driver from before they log in to the
rideshare app to the time they drop off their passengers. Mercury
claims that the policy add-on is as little as $6 per month
depending on premiums. 

AZ, CA, GA, IL, NV, OK, TX

Progressive


Progressive
offers ridesharing insurance as an add-on to
personal auto policies in most states. In the states where a
rideshare endorsement on a personal policy isn’t available,
Progressive will petition for a commercial policy. 

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

State Farm


State Farm
offers an add-on rideshare policy to an existing
personal auto policy. Rideshare insurance through State Farm
typically costs 15–20% of the premium. 

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

Travelers


Travelers
offers Limited Ride Sharing coverage in
Colorado
and
Illinois
— that’s it. This endorsement on an existing
policy provides auto coverage after drivers open a mobile
ridesharing app, but before connecting with a passenger.

CO, IL

USAA

Though
USAA
is only available to veterans, military members and their
families, rideshare insurance purchased through them effectively
fills the gaps in coverage provided by rideshare companies. The
policy is as little as $6 per month. 

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

What if My Area Doesn’t Have Rideshare Insurance?

Insurance for Uber drivers (or those driving for similar
rideshare companies) may not be available in every state through a
current personal auto policy provider, but it’s still possible to
get additional coverage. Consider switching to a provider that
offers a rideshare policy add-on, or go commercial. Commercial
insurance provides protection for any vehicle used for business,
including a car driven for Uber or Lyft. 

While commercial auto insurance offers coverage to drivers
without access to rideshare insurance,
the cost of insurance
may be significantly higher. According to

TrustedChoice
, the average commercial policy for a passenger
car is $1,200 to $2,400 annually. 

How to Purchase Rideshare Insurance

Rideshare insurance is not a stand-alone policy. It is either an
addition to an existing personal auto policy or a hybrid policy.
Because it must be purchased as an add-on, rideshare insurance must
come from the company providing personal auto coverage. 

Before applying for rideshare insurance, collect this
information: 

  • Make, model and year of the vehicle 
  • Rideshare companies worked for (if applicable)
  • Average number of monthly rideshare drives (if applicable)
  • Average number of miles driven per trip (if applicable)
  • Copy of valid driver’s license 
  • Copy of vehicle registration
  • Copy of vehicle title
  • Policy number for current personal auto policy


Most major insurance companies
offer a version of rideshare
insurance, though coverage may not be available in every
state. 

Approach the company providing personal auto insurance coverage
to learn more about their rideshare insurance options. 

What Happens If I’m in an Accident While Driving For Uber or
Lyft?

During Period 2 and 3 (from the time the driver matches with a
passenger until the driver drops the passenger off), coverage
offered by Uber insurance and Lyft insurance varies depending on
the scenario: 

  • For rideshare drivers who cause an accident, both Uber and Lyft
    provide coverage up to $1 million in total damages.
  • For rideshare drivers who are in an accident caused by another
    driver with little or no insurance, insurance for Uber drivers
    covers damages and injuries up to $1 million. Lyft insurance
    coverage varies by state. 

It is also possible to draw on comprehensive and collision
coverage from Uber and Lyft insurance as long as the personal auto
policy includes the same coverage. However, the deductible may be
high and the policy only applies once a ride request has been
accepted or when there are passengers in the car. 

During Period 1 (when a driver is waiting for a ride request), a
personal auto policy is most likely responsible for coverage. For
rideshare drivers who cause an accident during this period, a claim
should be filed with their personal auto insurance company unless
state law or the rideshare company’s policy states otherwise. If
the personal claim is denied or only partially reimbursed, the
rideshare company’s coverage begins. However, coverage from the
company in this scenario is limited and may not cover drivers
fully. 

In The Event of an Accident While Driving For Lyft 

Lyft insurance covers rideshare drivers in Periods 2 and 3 of
the drive. During Period 1, drivers could be at risk of limited or
no coverage if they do not have a personal rideshare insurance
policy. 

While Period 1 may leave rideshare drivers at risk of uninsured
damages, a separate rideshare insurance policy gives drivers the
protection they need. 

In The Event of an Accident While Driving For Uber 

Insurance for Uber drivers offers slightly more coverage than
Lyft, though drivers are still at risk during certain periods of
the drive.  

For those considering a career or side job (ride-hustle) as a
rideshare driver, having full coverage through an insurance policy
is key to avoiding costly damages in the event of an accident.
While rideshare companies like Uber and Lyft offer their own
insurance, these policies do not fully cover a driver at all
times. 

A separate rideshare insurance policy added to a personal auto

insurance policy
provides the protection drivers need, from the
time they log onto the rideshare app to the time they drop off
their final passengers. 

Related links:


What are the cheapest car insurance companies
?


What is the best car insurance for those with low income
?

 

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Rideshare Insurance Options for Uber and Lyft Drivers