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Lyft Insurance: Everything You Need to Know

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Whenever you’re driving, the need for car insurance is a given.

However, when you’re driving for Lyft, what you may not know is that your personal insurance policy probably won’t cover you if you get into an accident on the job.

Understanding how Lyft insurance works is the best way to protect yourself in your ridesharing career.

Does Lyft Provide Insurance to Drivers?

vector graphic showing a lyft driver outside of a lyft vehicle and holding an umbrella to signal Lyft insurance has him covered

Lyft does provide drivers with some insurance coverage, but the level of coverage you receive will depend on what stage you’re at in the driving process.

When you’re actively working on a ride request — from the time you accept a trip to the time you complete it — Lyft’s insurance will actually provide a hefty amount of coverage.

You’ll get the benefit of:

  • Primary liability insurance: You’ll get $1,000,000 liability coverage per accident for any property damage or bodily injury caused by your vehicle. No deductible applies.
  • Contingent collision coverage: If your car is damaged in a collision, you’ll be covered up to the cash value of your vehicle or total repair cost (whichever is lower), even if you’re at fault. A $2,500 deductible applies.
  • Contingent comprehensive coverage: If your car is damaged due to something other than a collision, you’ll again be covered up to the cash value of your vehicle or total repair cost (whichever is lower), even if you’re at fault. A $2,500 deductible applies.
  • UM/UIM coverage: If an uninsured or underinsured motorist causes any bodily injury, this coverage will help you and your passengers cover medical expenses with no deductible. Exact coverage or availability may vary depending on your market.

Be aware that Lyft requires you to add contingent collision and comprehensive coverage in your personal auto policy (if you haven’t already) to qualify for those two benefits on the rideshare company’s insurance.

Lyft Insurance: Everything You Need to Know

As long as you do so, you’ll have all the financial security you need when actively completing trips.

Unfortunately, when you’re on driver mode and simply waiting for new ride requests on your Lyft Driver app, the company only offers minimal coverage.

Between trips, Lyft’s insurance only provides primary liability coverage (no deductible), up to:

  • $50,000 per person
  • $100,000 per accident
  • $25,000 for property damage

This time of low coverage is known as the coverage gap. If you get into a serious accident between trips, you are susceptible to being underinsured.

Which means you’ll be responsible for paying the difference — if you don’t get your own Lyft insurance, that is.

How Lyft Insurance Works

vector graphic showing a lyft driver outside of a lyft vehicle and holding an umbrella to signal Lyft insurance has him covered

Lyft insurance coverage works similarly to any other type of auto insurance.

Drivers pay a small fee to the carrier, and in exchange, they receive coverage that could help them in the event of an accident.

In order for drivers to be eligible for coverage, they must have adequate insurance on their primary policy first.

Lyft insurance works according to phases which will notify the insurance company what needs to be covered, this includes:

Phase 1

Period when the driver is waiting for a request from customers.

This is when the car driver is most vulnerable because they do not have a specific passenger to cover.

The driver is responsible for covering for the time periods of pre-dispatch, post-dispatch or both.

For example, in the event that a driver was in a crash during pre-dispatch, then their personal insurance would be responsible for coverage.

However, if there was a crash during post-dispatch, then Lyft’s insurance policy would take over and handle the damages to your vehicle and any injuries sustained by both parties involved.

Phase 2

This is when the ride has been given to a rider and dropped off at their destination; thus the Lyft insurance increases to 100%.

In the event that there is an accident during this time period, then the passengers’ policy would handle all of the expenses related to any injuries or damages sustained.

Phase 3

This is when both the driver and passenger are no longer together in the vehicle.

The vehicle is still being used, but it is being used to find another rider this time.

In this period, Lyft insurance ends and a driver’s insurance gets activated if they have opted into pre-dispatch coverage.

Phase 4

This occurs when a driver has completed a ride request and returns to the staging lot where they must wait a certain amount of time before getting another ride request.

Similar to phase three in that the driver’s payment is very low and there may not be enough funds in their account to cover the damages caused by crashes or medical expenses.

All of these phases are important to be covered by Lyft insurance.

As you might know, drivers and riders connect on this app and they also need to be covered while they are doing this.

What Lyft Insurance covers

Drivers are typically required to have personal injury protection, liability coverage, and collision coverage.

Each one of these categories will come with its own specific requirements that a driver must meet in order for them to be covered under their policy from Lyft.

Lyft insurance covers three categories of damage which are :

Personal Injury Protection (PIP)

Personal injury protection is a good thing to have for people who run Lyft since in some states you can be held liable for their passengers’ injuries.

It covers medical expenses you may incur as a result of a car accident.

In any case, this coverage isn’t usually paid for by the driver.

Instead, it is usually paid by the insurance company and your state government.

Collisions (Collision-based)

Collisions covers health issues you might have as a result of an accident and includes things like medical expenses, pain, and suffering.

Liability

Liability Coverage is important for Lyft drivers because their passengers are paying customers – that means that the driver may be held liable for any damages or injuries caused during the ride.

Liability coverage protects the driver from legal liability for things such as injuries sustained by passengers.

Unless a driver has his/her own policy to cover these damages, it is unlikely that he/she will be able to work with a Lyft.

Comprehensive Coverage (Comprehensive)

This type of coverage is helpful if you have a car that is older than three years.

There are also deductibles in place for this coverage that will be deducted from your total payment if an accident occurs.

Aside from these four types, there are other forms of coverage that can be added as well.

For instance, some states may require backup and rental car coverage.

Getting Your Own Lyft Insurance Policy

In order to close the coverage gap, many drivers choose to purchase their own Lyft insurance, otherwise known as rideshare insurance.

Starting at as little as $6 per month, rideshare policies help you get peace of mind by bulking up your coverage between ride requests.

These rideshare insurance policies are now widely offered across insurance companies.

Even if your current auto insurance company doesn’t offer rideshare coverage in any shape or form, you can easily choose a different provider — such as Progressive or State Farm — that will.

Though the exact rideshare coverage you receive will vary based on the plans you choose, most Lyft insurance providers do minimally offer enhanced liability coverage during the gap period, while others give you a variety of additional coverage types during the entire time you’re active on the Lyft Driver app.

In some cases, Lyft policies will even help you reduce the $2,500 deductibles on Lyft’s insurance, in case you ever need repairs after a crash.

Another perk of getting rideshare insurance: If you specifically choose Geico‘s Rideshare Policy, Lyft will actually pay you up to 25 cents more per eligible trip, up to $500 every half year.

What Insurance Companies are Offered by Lyft?

Lyft is partnered with a number of insurance companies and carriers providing drivers with the opportunity to shop around for the best pricing on their coverage in order to avoid any unwanted surprises or hidden fees.

When they’re ready to sign up, they can go online and easily shop around for three quotes from three different carriers – all of which are supported by Lyft itself.

How much does Lyft Insurance cost?

The costs associated with having Lyft insurance vary depending on factors such as age, gender, type of vehicle and where you live as well as your driving history and credit score.

Lyft insurance prices will also vary from carrier to carrier and this is why it’s always important to shop around for the best value.

Here are examples of the different price points that can be expected based on some of the factors mentioned above:

1. Age

If you are over 25 years old and have a clean driving history, you may get a discount on your policy.

The younger you are, the more expensive your policy will be. Drivers between 18-25 years old may have to pay up to 50% more than the average cost of insurance on a Lyft policy while drivers over 57 years old may pay 10% more.

2. Gender

Lyft insurance isn’t gender-specific, but some companies may charge a slightly higher premium if you are a male driver.

3. Vehicle Type

Lyft insurance may cost less if you have had the same vehicle for some time and it is in good condition.

In the event that your vehicle has a lot of miles on it or if there are repair issues, then your rates will go up.

4. Location

Lyft insurance rates will vary depending on where you live.

If you live in an urban area with high crime rates and expensive car repairs, your rates will be higher than those who live in less populated areas or suburbs.

What do Lyft drivers need to know about their auto insurance?

It is vital for drivers to be aware that their insurance could be canceled or suspended if they do not have the proper coverage on their insurance policy.

If a driver’s policy gets canceled or suspended they are no longer eligible to drive for Lyft.

While Lyft is doing everything it can to make sure that the insurance requirements are clear and easy to understand, there are still many questions surrounding what is and what isn’t required in a policy.

What are the policies of Lyft Insurance?

Drivers must maintain proper coverage in order to drive as a Lyft driver legally.

While each state has different requirements regarding insurance coverage, drivers can rest assured that Lyft will help them find reputable insurers and guide them through the process.

Other policies are explained in the following list about Lyft insurance:

Collision Coverage: If a driver does not have any collision coverage on their policy and gets into an accident they will be held responsible for any damages and injuries that occur.

Medical Expenses: This type of coverage is basic health-related coverage.

This is to ensure that a Lyft driver will have access to emergency medical care regardless of where they are.

Personal Injury Protection: This kind of coverage ensures that a Lyft driver will be compensated if he or she has been injured during the course of driving for Lyft.

Insurance can be quite expensive for someone who drives for several different companies.

So, instead of using multiple different policies to protect themselves many Lyft drivers decide to self-insure.

This means that they have their own general liability policy to protect them from any accidents or claims that may occur when driving for Lyft.

What type of insurance is required for a driver to be legally eligible to drive for Lyft?

Drivers are required by law to have a number of coverages on their policy.

Including liability and personal injury protection.

Commercial insurance is required, though the amount and type of coverage will vary depending on a driver’s individual needs and location.

Before getting Lyft insurance you need to be aware what your auto insurance covers for you.

The state of California (CA) has very strict liability and personal injury protection (PIP) requirements.

Also, every driver has to have a minimum of $50,000 in bodily injury liability coverage per person and a total of $100,000 per accident.

Lyft works with both local and nationwide insurers and has relationships with numerous carriers.

Furthermore, Lyft drivers have access to Lyft insurance discounts, which could make the cost of their coverage much more affordable.

What are the gaps of Lyft Insurance?

While Lyft does its best to put drivers in touch with the best insurers to meet their requirements, there are a few gaps in the insurance coverage that Lyft drivers should be aware of.

These include injury protection and medical expenses coverage.

Lyft has partnered with several insurance companies, but not all of them cover all types of circumstances.

Drivers may also be required to purchase collision or uninsured/underinsured motorist coverage.

In addition, Lyft is not protected or affiliated in any way with any insurance company and is not responsible for any losses or issues that arise as a result of using their services.

How can I enroll in Lyft Insurance?

Drivers can start by setting up an account on their website at lyft.com.

After entering in a few details, their information will be verified and they will then be asked to enter in the number of miles that they typically drive when they are working for Lyft.

After this has been provided, drivers will receive an email from an insurance company and can then shop around for quotes that meet their needs.

Drivers can select their coverage and choose a policy before entering in their payment information on the site.

Once this is complete, Lyft will send them verification of the amount of coverage that they have purchased.

What are the requirements for enrolling in Lyft Insurance?

Drivers must have a valid vehicle registration or title.

In addition, they must also be able to provide proof of their insurance coverage.

If a driver is unsure whether he or she is covered by their existing insurance while driving for Lyft, they can use the tool above to get an instant quote from any of the carriers available on Lyft’s site.

There may be exceptions to the coverage requirements for Lyft drivers.

This means that a driver may be required to have additional insurance than what is being offered by Lyft’s current partners.

In addition, if they have any previous convictions on their record or if their car doesn’t meet certain safety requirements (like anti-theft measures), they may not qualify to drive with Lyft at all.

What to do if you get into an accident

In the case that you get into an accident, you will need to describe the accident in detail to Lyft’s support team.

If your injuries are serious enough to require medical attention, seek treatment immediately.

Document what occurred through photos and videos of the scene as well as any injuries that were incurred.

They will begin working on getting your claim started and will first ask for some basic information that includes:

• Date and Time of Accident

• Location of Accident

• Auto Insurance Company

• Name of Driver(s) Involved In the Accident

After providing this information, the Lyft support team will then send out notification messages to other parties about their involvement in the accident.

Once this has been done, the support team will then draft up an initial request for damages.

This part is essential as it may help prevent any fraudulent activity from occurring after an accident has taken place.

Lyft will also provide a final bill after the accident has taken place with the amount of damages that were incurred.

If a driver gets in an accident while driving for Lyft, he or she is responsible for paying the fines from the accident.

Since Lyft drivers are considered independent contractors, they will also pay for their own car repairs and medical bills.

In some cases, the driver may be responsible for paying for damages for both parties involved in the crash – which can be financially devastating.

Lyft vs Uber claims

Lyft versus Uber claims are similar but there are some differences between the two services to be aware of when it comes to insurance.

Lyft requires its drivers to have both a personal and commercial policy.

This will ensure that they have enough coverage for both types of incidents that may occur as a result of their driving for Lyft clients.

Drivers can easily add on insurance through their online portal without having to go into their local insurance office.

On the other hand, Uber only requires that their drivers have a personal insurance policy.

The drivers are responsible for their own medical expenses and will only be covered on a per incident basis.

One of the major differences between Lyft and Uber insurance is that Lyft covers drivers while they are on the job whereas Uber does not include any coverage while they are actually driving.

Wrapping Up

Lyft insurance is a great option for drivers who are looking to get paired with the best insurance company with the most affordable rates.

While Lyft may not be affiliated in any way with an insurance agency, they are still able to provide drivers with plenty of options that can be easily and quickly shopped around on their website.

The best part about Lyft’s insurance is that it is available on a short-term basis and will only cover you while you are driving for the company.

Additionally, it only requires that your vehicle has a proper registration.

Lyft has been very conscientious about making sure that all of their drivers have adequate coverage to protect their vehicles as well as their passengers.

Sources

  • https://www.caranddriver.com/car-insurance/a36148122/lyft-insurance/
  • https://clearsurance.com/blog/lyft-insurance-explained
  • https://quirkwins.com/lyft-insurance/https://www.nolo.com/legal-encyclopedia/what-do-uber-and-lyft-drivers-need-to-know-about-car-insurance.html

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