If you drive your car for money, you need rideshare insurance. This is a type of commercial auto insurance that covers you when you are driving for rideshare or food delivery services like Uber, Lyft, DoorDash, and Postmates. Rideshare insurance fills the gaps in your personal auto insurance and rideshare company insurance, and it can protect you from liability claims, property damage, and bodily injury.
In this article, we will explain what rideshare insurance is, why you need it, where to buy it, and what factors to consider when choosing it. We will also provide some tips on how to save money on rideshare insurance and avoid common mistakes.
What is Rideshare Insurance?
Rideshare insurance is a hybrid policy that combines the coverage offered by your rideshare company and your personal auto insurer. You typically can’t buy rideshare insurance as a stand-alone policy, but you can add it to your existing car insurance policy through an endorsement.
Rideshare insurance covers you when you are driving for a rideshare or food delivery service, whether you are online and waiting for a request (Period 1), accepting a ride request (Period 2), or carrying passengers (Period 3). Your personal auto insurer may not cover you during these periods, especially if you don’t disclose that you drive for money.
Rideshare insurance also covers you when you are not driving for a rideshare or food delivery service. Still, your personal auto insurer may cancel your policy if it finds out that you do. This can happen if your employer requires proof of income or if your insurer detects unusual driving patterns.
Rideshare insurance is different from rideshare company insurance because it provides more comprehensive coverage than the minimum liability limits required by most states. Rideshare company insurance only covers bodily injury and property damage that occurs while you are driving with a passenger, but not while you are online and waiting for a request.
Why Do You Need Rideshare Insurance?
You need rideshare insurance because it can protect you from potential coverage gaps that may arise from using your personal auto insurance for business purposes. Here are some of the benefits of having rideshare insurance:
- Protection against potential coverage gaps: If your personal auto insurer cancels your policy or denies your claim because they find out that you drive for money, you will lose access to the coverage that pays for medical expenses, lost wages, and other damages in case of an accident. Rideshare insurance can cover these costs while you are online and waiting for a request.
- Liability coverage for bodily injury and property damage: Rideshare insurance can provide higher liability limits than the minimum required by most states ($25,000 per person/$50,000 per accident). This means that if someone gets injured or their property gets damaged while they are in your car during Period 2 or 3, they can sue you up to the limit of your coverage. Rideshare company insurance only covers up to $1 million per person/$2 million per accident.
- Specific insurance requirements for rideshare drivers: Depending on where you live and work as a rideshare driver, there may be additional requirements or restrictions on how much coverage you need to have. For example, some states require drivers to have at least $50,000 in bodily injury liability coverage per person and $100,000 in total bodily injury liability coverage per accident. Some states also require drivers to have at least $25,000 in property damage liability coverage per accident. Rideshare insurance can meet these requirements by providing higher limits than the minimum required by most states.
- Flexibility for part-time and full-time drivers: If you drive part-time or full-time as a rideshare driver, you may need different levels of coverage depending on how many hours or miles you drive each week. For example, if you drive more than 40 hours per week or more than 100 miles per day as a rideshare driver, you may need higher limits than the minimum required by most states ($25,000 per person/$50,000 per accident). Rideshare insurance can provide these limits by adding them as an endorsement to your existing car insurance policy.
- Customer reviews and reputation of insurance providers: When choosing an insurance provider for rideshare drivers, it’s important to consider their customer reviews and reputation. You want an insurance provider that has positive feedback from other drivers who have used their services. You also want an insurance provider that has good financial stability and claims handling process. Some of the best-rated providers for rideshare drivers include State Farm, Farmers, and Progressive.
Where to Buy Rideshare Insurance?
You can buy rideshare insurance from many of the largest auto insurers in the country, including State Farm, Farmers, and Progressive. However, not all states offer rideshare insurance, so you may need to check with your state’s insurance department or your rideshare company to see if they offer it. You can also compare quotes from different providers to find the best deal for your situation.
Factors to Consider When Choosing Rideshare Insurance
When choosing rideshare insurance, you should consider several factors that can affect your coverage and cost. Here are some of the most important ones:
- Cost of premiums: Rideshare insurance is usually more expensive than personal auto insurance because it covers more drivers and more situations. The cost of premiums depends on several factors, such as your age, driving history, location, vehicle type, and usage. Generally, the more you drive and the more you drive for money, the higher your premiums will be.
- Coverage limits and deductibles: Rideshare insurance offers higher coverage limits than personal auto insurance, which means that you can pay for more damages or injuries in case of an accident. However, higher coverage limits also mean higher premiums. You should choose a coverage limit that matches your budget and your needs. You should also choose a deductible that you can afford to pay out of pocket in case of a claim.
- Additional benefits and features: Rideshare insurance may offer some additional benefits and features that personal auto insurance does not, such as rental car reimbursement, trip cancellation/interruption coverage, personal injury protection (PIP) or uninsured/underinsured motorist coverage (UIM). These benefits and features can provide extra protection and peace of mind for rideshare drivers.
- Flexibility for part-time and full-time drivers: Rideshare insurance may offer different levels of coverage depending on how many hours or miles you drive each week as a rideshare driver. For example, if you drive more than 40 hours per week or more than 100 miles per day as a rideshare driver, you may need higher limits than the minimum required by most states ($25,000 per person/$50,000 per accident). Rideshare insurance can provide these limits by adding them as an endorsement to your existing car insurance policy.
- Customer reviews and reputation of insurance providers: When choosing an insurance provider for rideshare drivers, it’s important to consider their customer reviews and reputation. You want an insurance provider that has positive feedback from other drivers who have used their services. You also want an insurance provider that has good financial stability and claims handling process.
