Every driver knows that insurance is required by law when they’re on the road, but when you’re driving for a rideshare app, you may be legally safe without being adequately protected — even if you think you are. When you get into a Lyft or Uber accident, a rideshare insurance policy can save your wallet by giving you the coverage you need.
If you dive into the terms of your personal auto policy, you’ll most likely find that your insurance doesn’t apply at all for commercial use. At the same time, Uber and Lyft aren’t providing you with full coverage through their complementary policies the whole time you drive. When you’re earning money through ridesharing, any bad car crash can lead to massive debt on top of injuries.
We’ll walk you through where Uber and Lyft are leaving you vulnerable, as well as the different types of rideshare insurance you can choose from.
- What Is the Rideshare Coverage Gap?
- What Is Rideshare Insurance?
- 3 Types of Rideshare Insurance
- Rideshare Insurance Options for Drivers
- Frequently Asked Questions
Table Of Contents
The rideshare coverage gap occurs when you’re logged online and waiting for requests. During this time, your personal auto insurance does not apply, while your free Uber insurance or Lyft insurance policy will offer very little coverage.
If you get into an accident where you’re at fault within this coverage gap, Lyft and Uber will both only provide $50,000 per person, $100,000 per accident, and $25,000 for property damage. This will already prove to be less than ideal when the other party’s medical expenses add up or their vehicle is determined to be a total loss. To make matters worse, neither rideshare company offers any form of coverage for your own bodily injuries or car damage when you’re between trips.
This low coverage is a far cry away from Uber and Lyft’s excellent coverage when you’re actively working on a ride request. From the time you accept a trip to the time you complete a drop-off, Lyft and Uber car insurance both offer $1 million in liability coverage, full comprehensive and collision coverage, and great uninsured/underinsured motorist coverage. This illustrates the huge coverage gap that you’re left with when you’re idling between trips.
But even when you’re en route to your pick-up or drop-off location, there is still a small gap that many rideshare drivers are unaware of. To get your collision and comprehensive coverage, you must first pay a high deductible of $1,000 (for Uber) or $2,500 (for Lyft).
Rideshare insurance can help with both of these gaps.
Rideshare insurance is protection you need to ensure that you’re fully covered during the coverage gap. Where your personal auto insurance policy doesn’t apply and your ridesharing company’s policy doesn’t offer much help either, this insurance option will fill in the holes. This way, you won’t be left paying thousands of dollars after a car crash.
At the very least, rideshare insurance coverage will boost your coverage during the waiting period. At the max, it can fully replace your personal policy with a plan that’s perfect for both rideshare and personal use.
One of the best things about rideshare insurance is the fact that it can cost you as little as $10 per month — and that expense is often tax deductible. While greater ridesharing coverage will, of course, cost more, getting the basics of what you need is affordable enough that all Uber and Lyft drivers should be adding this type of insurance to their shopping lists.
Selecting the right type of rideshare insurance for your needs can be a hard choice. Not only do you have to think about how much protection you personally would feel most comfortable with, but you also have to consider what insurance company you’re currently working with and whether or not you’re willing to switch.
Below, we’ll explain the three main types of rideshare insurance policies, so you can wisely take your pick.
1. Gap Insurance
If you’re looking for a cheap, no-frills coverage option, gap insurance may be a great fit. This is a type of add-on policy that simply ups your protection during the coverage gap, giving you exactly what you need. Gap insurance sometimes takes the form of a simple “rideshare endorsement” that’s added to your personal insurance policy to show that you have extra coverage.
Gap insurance doesn’t always just cover the waiting period. In some cases, if you get into a crash during an active trip, it can also lessen the deductibles that you owe before you get covered for your injuries and car damages.
Popular car insurance companies that offer gap insurance include Travelers Insurance, Allstate, Metlife, and Progressive.
Link to newest “gap insurance” post when published
2. Extended Coverage
Another form of rideshare insurance simply extends your personal policy into your commercial use. Instead of buying a separate add-on, Lyft and Uber drivers can simply pay extra on their personal plans to get the same coverage while they’re earning on the road.
Of course, this extended coverage option is only available to you if your current provider offers it. Safeco, State Farm, Erie, Mercury, and USAA are all trusted companies that offer this type of rideshare insurance. You’ll need to reach out to your provider to get an exact insurance quote, since your final price will depend on what’s included in your current coverage.
3. Coverage Replacement
Looking for a more comprehensive option than both gap insurance and extended coverage, without buying commercial insurance? You may want a brand new policy that replaces your current one altogether.
As the gig economy grows, more insurance companies are offering plans that are specifically built for rideshare drivers and their lifestyles. This hybrid personal and rideshare insurance covers virtually all your driving activities, whether you’re waiting for requests, en route to a pick-up location, or logged off your app and simply heading to the grocery store.
Again, this type of plan will completely replace your personal policy, so there’s no need to worry about staying with your current provider if your heart is set on this type of insurance. Geico is the most popular coverage replacement provider, though companies like Allstate and Progressive do offer this type of rideshare insurance, too.
Looking into insurance options for rideshare drivers can get pretty overwhelming, so we’ve assembled a list of the most popular companies to consider when shopping around.
1. Farmers Insurance Group
Farmers Insurance Group is one of the established giants when it comes to auto insurance. The company offers rideshare insurance to Uber and Lyft drivers by extending their personal auto insurance coverage. The drivers are covered from the time they log into the app up to the time they choose to accept a rider.
This is great for those drivers who don’t often log in as full-time rideshare drivers or for those who treat rideshare as a side job. Coverage is currently available in 29 states.
Some of the coverage options drivers can choose from with Farmers include:
- Uninsured Motorist Coverage (in case the driver’s car is hit by an uninsured or underinsured driver)
- Comprehensive Coverage
- Collision Coverage (this will pay for the damages to the driver’s car)
- Medical payment and personal injury protection
Call Farmers Insurance Group at 1-800-493-4917, or contact an agent near you to learn more.
2. State Farm
State Farm also extends the coverage of the driver’s personal auto policy when the car is used for rideshare. Although they cover most every rideshare app from the time the driver accepts a rider until the passenger reaches the destination, State Farm does not cover drivers for any liabilities to others.
Here is State Farm’s rideshare driver coverage while on the road with a passenger:
- Damage to the driver’s car
- Medical coverage
- Rental reimbursement
- Uninsured/underinsured motorists
- Emergency road service
This type of insurance is pretty affordable, and it adds around 15 to 20 percent to a current premium with State Farm, depending on various rating factors include coverage options chosen and discounts that may apply.
Give State Farm a call at 1-800-782-8332, or contact an agent near you to learn more.
Allstate’s “Ride for Hire” rideshare insurance plan can fill some of the gaps that can arise between a TNC company and the driver’s personal auto policy. It means whether the driver is waiting for a passenger or commuting to a destination, Allstate can protect the driver from risky coverage gaps for as little as $15-20 per year.
This coverage can also give drivers protection against high deductibles from their rideshare companies.
Something to keep in mind with this policy is that while Allstate covers most rideshare apps, they don’t guarantee continuous coverage when signed into the app. A driver may have to get a separate policy with different terms just to acquire a full coverage, so make sure to run this by an agent when inquiring about an insurance quote.
For more information on an Allstate rideshare insurance policy, get in touch with an agent near you.
Geico is another one of the best insurance companies for rideshare drivers. They offer a uniform policy, which means this policy replaces the driver’s personal auto policy, providing coverage whether they are using the car for business or personal reasons. In addition, regardless of if the driver has a passenger or not, Geico’s Hybrid Coverage policy has them covered.
Choosing a Geico rideshare insurance policy eliminates many coverage gaps, so drivers don’t have to worry about what policy they have to use when an accident occurs. They can rest easy knowing that they’re covered.
Geico’s rideshare insurance covers the following:
- Property damage
- Bodily injury
- Collision coverage*
- Comprehensive physical damage coverage*
- Medical payments*
- Uninsured motorist coverage *
*These coverages are included in the First Part Coverage, which is optional.
Drivers can get Geico’s rideshare coverage for much lower than commercial rates, which can cost around $150 per year, and they are also available in most states.
Get more information about a Geico Hybrid Coverage policy by calling (866) 509-9444, or reaching out to a local Geico agent near you.
We understand that drivers looking for rideshare insurance options can get overwhelmed pretty easily, so for your convenience, we created a simple and easy-to-read table that outlines this information.
We’re constantly adding to our rideshare driver information pages, so let us know what you think about our table by leaving a comment below. We’ll update the table based on driver feedback, so definitely let us know what you think!
Frequently Asked Questions
Now that you know why you need rideshare insurance and where you can get it from, read these FAQs for more insight into your protection options.
Once I have rideshare insurance, will Uber and Lyft continue to provide any coverage?
Uber and Lyft will no longer cover you between requests once you have rideshare insurance that offers full protection.
However, if you’re actively on a trip at the time of an accident, Lyft expressly states that its en-route coverage will still apply on top of your rideshare insurance, so you’ll still have extra protection even if your policy isn’t enough. Uber doesn’t specify what happens if you have rideshare insurance, so exact terms may vary by state.
Do Lyft or Uber provide any perks if I purchase rideshare insurance?
While Uber doesn’t offer any perks to drivers with rideshare insurance, Lyft does if you choose Geico’s Rideshare Policy. As of July 2020, Lyft will pay you 25 cents extra for each eligible trip you complete (up to $500 every six months) once you activate the Geico policy and add “Lyft, Inc.” as an additional interest.
Do I need rideshare insurance if I have a commercial insurance policy?
No, if you have commercial insurance, you should have great coverage whenever you’re driving for a rideshare app, regardless of what stage of driving you’re in. Since drivers in New York City, as well as drivers for premium Uber services like Black and Lux, are required to have this type of insurance, they don’t need to pay even more for rideshare insurance.
However, if commercial insurance is not required for your role, we recommend rideshare insurance since it tends to lessen costs by focusing on the protection you actually need in your gig.
Get More Insured
Driving your personal car for a rideshare app may already feel like a risky move, but driving without rideshare insurance is taking risk to a whole new level. When you invest in additional coverage, you can save yourself hundreds or thousands of dollars. When you’re faced with an accident caused by you or an underinsured motorist, rideshare insurance will be the reason you maintain your peace of mind.
If you just need an affordable personal car insurance policy before you even think about rideshare coverage, take a look at our guide to Metromile, the insurance provider that’s charging drivers based on how much they actually drive.