Overview of Lyft’s Insurance Policy
Whether you’re a driver or a passenger, Lyft provides insurance coverage for both of you in cases of accidents. This insurance policy is structured for different periods of the ride to ensure protection throughout your entire journey.
Once you start the application and wait for requests, you’re now in period 1, which provides third-party liability insurance.
When you get a request, you enter period 2, which is applicable until you reach your passenger and pick them up. That’s when first-party coverages start to appear.
Once you pick up your passenger and begin period 3, medical payment coverage for you and your passenger comes into play. In the following sections, we’ll explain each period in detail.
Types of Coverage
Lyft’s insurance policy provides the following types of coverage:
- Liability: This coverage pays for bodily injury and property damage caused by the driver to others.
- Uninsured/underinsured motorist: This coverage pays for bodily injury and property damage caused by uninsured or underinsured drivers.
- Comprehensive: This coverage pays for damage to the driver’s vehicle caused by events other than collisions, such as vandalism, theft, or fire.
- Collision: This coverage pays for damage to the driver’s vehicle caused by collisions with other vehicles or objects.
Insurance Coverage While Waiting for a Ride Request (Period 1)
In period 1 (while the application is on), Lyft considers the drivers engaged in business. As such, they should have commercial insurance.
Still, Lyft’s insurance policy provides primary coverage for any accident that may happen within this period. In other words, as a driver, you don’t need to buy commercial insurance.
Should you, as a driver, get involved in an accident while waiting or driving around while waiting, you should immediately notify Lyft. They would then investigate the accident and determine liability. If Lyft is found to be liable, they will pay for the damage up to the policy limits.
Period 1 Insurance Coverage
During this waiting period, Lyft provides third-party liability insurance with a minimum of:
- $50,000 per person for bodily injury.
- $100,000 per accident for any physical injury.
- $25,000 per accident for any property damage.
Insurance Coverage While En Route to Pick Up a Passenger (Period 2)
Period 2 begins when the driver has accepted the passenger’s request and started driving towards their destination.
During this period, Lyft provides third party-liability, first-party coverage, and contingent comprehensive and collision coverage.
This coverage protects the drivers from bodily injury and any property damage made by others (like pedestrians, and other vehicles).
It covers various costs like medical expenses and lost wages, up to $1,000,000.
This coverage includes:
- Uninsured/underinsured motorist (UM/UIM) coverage: This coverage protects drivers from injuries caused by motorists (whether they were insured or not). Unfortunately, many drivers do not have insurance, and many drivers who do have insurance have inadequate coverage.
- Personal injury protection (PIP): This coverage pays for medical expenses and lost wages for injuries that may affect the driver in an accident, regardless of who caused the accident.
Contingent Comprehensive and Collision Coverage
If the driver has comprehensive and collision coverage on their personal auto policy, Lyft provides contingent comprehensive and collision coverage up to the actual cash value of the car ($2,500 deductible).
This coverage protects the driver’s vehicle from damage caused by collisions or other events, such as theft, vandalism, or fire.
Insurance Coverage During a Passenger Trip (Period 3)
Lyft’s insurance coverage is at its maximum while the passenger is in the car. This coverage includes all coverage available in period 2 plus additional coverage for the passenger and the driver’s vehicle.
This includes the $1,000,000 third-party liability coverage, the UM/UIM, and the PIP coverage.
The extra here is the Medical payments coverage or (MedPay). This coverage pays for medical expenses or injuries that the driver or the passenger might sustain in an accident regardless of who caused the accident.
This coverage is active until the passenger is dropped at their desired destination.
What Lyft’s Insurance Doesn’t Cover
While Lyft has great insurance coverage, it doesn’t cover the following scenarios to avoid coverage abuse:
Scenarios During Period 1
Lyft doesn’t cover personal injury property damage caused intentionally by the driver to themselves or their vehicle.
It also doesn’t cover accidents that occur in jurisdictions where Lyft’s insurance policy is not available
Scenarios During Periods 2 and 3
Lyft doesn’t cover any damage caused by intentional acts or willful misconduct by the driver.
The coverage is also invalid if the driver is under the influence of drugs or alcohol, or using their vehicle for any illegal purpose.
Lastly, Lyft doesn’t cover wear and tear damage, or personal belongings lost or stolen from the vehicle.
- Any damage that exceeds policy limits isn’t covered.
- Any damage during activities other than driving for Lyft
Note: Keep in mind that Lyft’s insurance policy is secondary to the driver’s personal auto insurance, which means that the driver’s personal insurance will pay first if they have coverage.
Additional Insurance Considerations for Lyft Drivers
Personal auto insurance policies often exclude coverage for commercial activities like rideshare driving.
To fill this gap, many insurers offer rideshare endorsements to extend collision and comprehensive coverage during periods 1 and 2 of a ride.
As a rideshare driver, you should disclose your intentions to rideshare to your insurance provider instead of hiding it, even if your current policy excludes commercial driving.
This allows the insurer to offer appropriate endorsements or suggest an alternative commercial policy to provide complete protection.
We mentioned that Lyft’s insurance covers Periods 2 and 3. Still, it does not provide collision or comprehensive coverage in Period 1.
Because of that, purchasing a rideshare endorsement or commercial policy can fill this gap so you can have seamless protection at all times while driving for Lyft.
How Much Does Lyft Insurance Cost?
The cost of Lyft insurance depends on various factors including the driver’s age, gender, vehicle type, location, driving history, and credit score. Additionally, prices differ among insurance carriers, making it essential to compare options for the best value.
Here’s how these factors can influence Lyft insurance costs:
- Age: Drivers over 25 with a clean driving history may receive discounts. Conversely, drivers aged 18-25 could pay up to 50% more, while those over 57 might see a 10% increase.
- Gender: Although Lyft insurance is not gender-specific, some insurers may charge male drivers a slightly higher premium.
- Vehicle Type: Insurance may be more affordable for drivers with older, well-maintained vehicles. Rates increase for vehicles with high mileage or needing repairs.
- Location: Living in urban areas with high crime rates or expensive car repairs can lead to higher insurance rates compared to those in less populated or suburban areas.
How to Handle Accidents and Insurance Claims with Lyft
Should an accident happen while you’re driving for Lyft, follow these steps:
Step 1: Safety
The first thing you should do is to ensure your safety as well as your passengers. Leave the car if it’s too dangerous to stay inside, and call an ambulance in case of severe injuries.
Step 2: Take a Picture
Taking a picture/video of the crashed vehicles will help your case to prove your eligibility for compensation.
Step 3: Move the Cars Away
If the vehicles involved in the accident are blocking the road, you should move them to the side if possible.
Step 4: Contact Lyft
Immediately notify Lyft by using the app or calling the support line. Provide all details about the accident, including location and time.
Step 5: Exchange Information
Exchange insurance information with other parties involved in the accident. At this point, it would be wise to take your time gathering photographic evidence of the accident as well as any witness statements.
Understanding Lyft’s insurance policy will allow you to fill in the gaps and provide maximum insurance while working.
Review your personal insurance policy and how it fits with Lyft’s coverage to see whether you’re thoroughly insured during your work with Lyft. If your brain is too busy to handle all the minute details, seeking professional advice can greatly help.