How does rideshare insurance work?
If you’re using an online app and accepting ride requests from passengers for a fee, you’ll want to make sure you, your vehicle, and your passengers are properly insured during the entire process.
How rideshare services cover their drivers:
Turning on the app and waiting for a customer (period 1): Rideshare companies will cover you as soon as you log in to their app, but it’s sometimes for a small amount of liability only. That means you’ll be covered at the state minimum or more for any injuries and damages you cause while the app is active and you’re waiting for a passenger. Both Uber and Lyft offer up to $50,000 for bodily injury liability per person and up to $100,000 for accident, which is double the minimum liability limits in most states. Additionally, you’re covered up to at least $25,000 in property damage liability.
Accepting a request (period 2): Once you’ve matched with a rider and you’re on your way to pick them up, your coverage normally increases. Depending on your state and rideshare service, you may be covered up to $1 million for uninsured/underinsured motorist coverage as well as any incident in which you’re liable. Comprehensive and collision coverages also kick in at this point on a Lyft or Uber insurance policy, meaning you’re covered for physical damage to your vehicle from an accident, regardless of fault. The deductible, or the amount of money you’ll pay out of pocket if you file a claim involving damage to your vehicle, is $2,500 through Lyft and $1,000 through Uber.
Transporting your passenger (period 3): Same coverage as period 2. While you’re driving your passenger to their destination, both Lyft and Uber insurance provide liability, uninsured/underinsured motorist, plus comprehensive and collision coverages.
When your car is not covered by a rideshare service
With any rideshare insurance policy, you’ll likely have no coverage for damage to your vehicle in two instances:
- The period between signing into the app and matching with a passenger
- The period after you’ve dropped off a passenger but you’re still logged in and are waiting to match with another passenger
That means if you’re in an auto accident with an object, vehicle or animal, or if your car was stolen or vandalized during one of those instances, your rideshare policy won’t cover physical damage to your vehicle.
Filling in rideshare coverage gaps with a personal auto policy
Both Uber and Lyft require drivers to have personal auto insurance. Your personal auto policy can cover your car for physical damage during the periods when your rideshare policy won’t. However, just because you have a personal auto policy in place, doesn’t mean you’re automatically covered if you have a claim while driving for Uber or Lyft. You’ll need to add rideshare insurance to your personal auto insurance policy.
Pro tips prior to driving for a rideshare service
Notify your auto insurance company immediately: If you fail to let them know, you’re unlikely to have coverage while driving for a rideshare service. Moreover, your policy could be cancelled if you failed to let your insurer know and they find out that you’re using a vehicle on your policy to transport passengers for a fee.
Find out if they’ll cover you for ridesharing on your personal policy: Some insurance companies don’t offer rideshare insurance. If yours doesn’t, you’ll want to switch to a company that does. Depending on your state, you may be required to purchase a commercial policy. While commercial insurance is typically more expensive, it’s the only way to obtain rideshare insurance in certain states.
Make sure you’re covered properly: While your personal or commercial policy may cover the gaps on an Uber or Lyft policy, it’s important to make sure your protection is customized. Uber and Lyft don’t offer gap (loan/lease payoff) coverage or medical payments. If you owe more on your vehicle than it’s worth, consider adding loan or lease payoff coverage to your personal or commercial policy. Same goes for medical payments. If you’re involved in an accident and your rideshare passenger is injured, they can take advantage of the medical payments on your policy.
What if I’m at fault in an accident and my customers are injured?
Your liability coverage from your rideshare service can cover injuries to your customers up to the company’s stated limits. For example, if your customer suffers injuries in an accident, Uber and Lyft will cover up to $1,000,000 per accident. If your claim is denied or the rideshare company isn’t offering that kind of protection, your personal or commercial liability coverage could kick in up to the stated limits of your policy.
Rideshare insurance through Progressive
We offer affordable ridesharing insurance as an add-on to your personal auto policy in most states. In the states where a rideshare endorsement on your personal policy isn’t available, we can help you obtain a commercial policy.
Current Progressive customers
Call us at 866-749-7436 and a licensed professional will let you know if you can add rideshare insurance to your personal auto policy or if you need a commercial policy.
New Progressive customers
Livery insurance for taxi and limousine drivers
If you drive a taxi, limousine or any other vehicle used by a business to transport people for a fee, you’ll typically need a commercial auto policy or “livery insurance.” Progressive offers for-hire livery insurance in 38 states. Call us today and speak with a licensed expert or specialty agent for commercial policies. You can also get a livery insurance quote online.