Driving for a company like Lyft or Uber can be a great gig to make extra cash, but you’ll want to check that you’re insured before you pick up your first passenger or make your first delivery. The company you drive for may offer some coverage, but rideshare insurance works to fill in the gaps between this and your personal auto insurance policy.
In this article, we’ll discuss how rideshare insurance works, who offers rideshare policies, and what happens if you get into an accident on the job. We have also reviewed the best car insurance companies in the industry and will give our recommendations for top providers that offer rideshare insurance here.
If you’re looking for the best car insurance rates, you can use the tool below to start comparing free quotes.
What Is Rideshare Insurance?
Rideshare insurance is coverage for motorists who are employed by transportation network companies (TNCs) like Uber or Lyft or who work for on-demand delivery services. It’s a coverage option that insures against vehicle damage and injury to passengers, and it is designed to fill in gaps between the coverage provided by the TNC and a driver’s personal auto insurance.
If you are a rideshare driver and are in a collision while on the job, your personal car insurance may not cover the damage. This is because a personal car insurance policy typically excludes a vehicle if it is being used for business. In fact, not informing your insurer you drive for a rideshare service could result in you being dropped by your provider.
TNCs, also called rideshare companies, offer insurance coverage only during certain periods of work, such as when you have a rider in your vehicle. However, if you want more protection, you’ll need to get rideshare insurance.
Rideshare Insurance Vs. Commercial Insurance
Something to note about rideshare coverage is that availability varies from state to state. If you can’t purchase a rideshare policy, you may have to get commercial insurance.
Commercial insurance is geared toward people who use their car for more than just the commute to work. Those who qualify for this type of auto coverage are people like pizza delivery drivers, employees who drive long distances to meet with clients or survey job sites, or those that transport tools and needed equipment to work.
These types of policies are usually more expensive than traditional auto insurance because drivers need higher liability limits in the case of damaged property or injuries when transporting goods or passengers.
Do You Need Rideshare Insurance?
While rideshare companies and food delivery apps may not require you to carry rideshare insurance, they will require you to have the base amount of liability car insurance needed in your area. After that, drivers should review their personal insurance policies and what’s covered by the TNC to determine gaps in coverage. Buying a rideshare policy will be considered an add-on to your existing coverage.
Because the rideshare company’s coverage is only meant to cover drivers while they’re on the job, when coverage does and doesn’t apply is broken into phases. For example, Uber and Lyft cover damages up to $1 million, minus your deductible, if you have passengers in the car or if you’re en route to pick up a rider. If you’re awaiting a ride request, both companies offer third-party liability coverage up to $50,000 in bodily injury per person, $100,000 in bodily injury per accident, and $25,000 in property damage per accident.
Here’s a further breakdown:
|Activity Phase||Rideshare Insurance Coverage|
|Rideshare app is offline||Covered by personal insurance policy|
|Driver has rideshare app on and is waiting for a ride request||No longer covered by personal policy – rideshare company provides liability coverage up to 50/100/25*|
|Driver accepts a ride request and is en route to pick up a passenger||Rideshare company provides liability insurance, underinsured/uninsured motorist coverage, and contingent comprehensive and collision coverage**|
|Driver has a passenger in the car||Rideshare company provides liability insurance, underinsured/uninsured motorist coverage, and contingent comprehensive and collision coverage**|
*May vary if your state has higher minimum liability limits.
**Only eligible if you have personal collision and comprehensive insurance.
Lyft and Uber insurance policies are nearly identical. Uber even raised its deductible for collision insurance and comprehensive insurance from $1,000 to $2,500 in March 2021 to match Lyft. Both companies also provide insurance in the event of bodily injury to the driver or passenger.
Depending on the TNC, the main gap rideshare insurance fills is when your app is on and you’re waiting for a ride request. The company may provide liability insurance during this time, but you’re on your own when it comes to collision coverage and comprehensive coverage.
So, the question becomes: Do you need full coverage when you’re waiting for a ride request? Adding rideshare insurance can also help you pay for medical costs and damage to your vehicle if you find the rideshare company’s deductibles are too high.
Meal Delivery Drivers
While Lyft and Uber drivers are obvious candidates for rideshare coverage, drivers for delivery app companies like Instacart and Grubhub can find themselves with similar coverage gaps if they’re not properly insured.
Here are a few examples of how popular food delivery apps handle insurance coverage:
- Uber Eats: Offers similar coverage for both its rideshare drivers and delivery drivers
- Postmates: Provides coverage once a request has been accepted and a driver is en route to the delivery, as well as when the delivery is being made
- DoorDash: Coverage begins only after a driver has picked up an order and has the delivery in the vehicle
- Instacart and Grubhub: Insurance is entirely left up to the driver’s personal coverage policies
You can check with your personal insurer to check whether you’d be covered while working for any of these services.
How To Purchase Rideshare Insurance
As mentioned, rideshare insurance is considered supplementary coverage that can be added to your existing personal auto insurance policy. It’s also not sold as an individual insurance product, so you’ll have to buy it from your current insurance provider.
After signing up to be a rideshare driver, the first thing you should do is notify your insurance provider that you’re working for a TNC. Then, assess the gaps between your personal auto policy and the coverage your employer provides. If your current insurer doesn’t have rideshare insurance, see if it offers commercial coverage instead.
What Happens If You’re In An Accident On The Job?
As stated above, if you get into a wreck while driving for a rideshare company or delivery app, the level of coverage you get is going to depend on what stage of work you were in.
Regardless of whether you are driving for a company at the time of a collision, the first thing you should do is call law enforcement. An officer can assess the severity of the crash and make sure the medical needs of those involved are being met.
You might be asked to provide proof of insurance, either your personal policy or coverage from the rideshare company. This is also the time to exchange insurance information with any other drivers or passengers involved.
The next thing to do is alert your insurance provider you’ve been in an accident. Whether your provider or the rideshare company covers the damage will depend on what phase of work the accident occurred in, but your insurer will still want to keep a record of your recent driving history.
You should also notify the rideshare company or delivery app to file a claim if you qualify for the company’s coverage.
Our Recommendations For Rideshare Insurance
Rideshare insurance is an add-on policy that’s offered by most major insurers. We suggest checking if your current coverage provider offers rideshare insurance or commercial insurance.
If you’re looking to switch insurers to get a lower rate or if your current provider doesn’t have rideshare coverage, we recommend checking out any of the companies in the table below. Our research team has reviewed the top insurance providers in the United States and found these to be standout options for rideshare insurance.
|Insurance Company||Motor1 Rating||Our Award||Rideshare Insurance Availability*|
|USAA**||4.8 out of 5.0||Best for Military||Service in all states except Alaska, Hawaii, Michigan, Montana, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Virginia|
|Geico||4.6||Best Overall||Service in all states except Alaska, Georgia, Kentucky, Michigan, Nevada, New Jersey, New York, North Carolina, Texas, Utah|
|State Farm||4.6||Best for Students||Service in all states except Alaska, Hawaii, Illinois, Massachusetts, New York, North Carolina|
|Progressive||4.6||Best for High-Risk Drivers||Service in all states except Alaska, California, Delaware, Hawaii, Kansas, Maryland, Montana, Nevada, New Hampshire, New Jersey, New York, North Carolina, Oregon, South Carolina, Vermont|
|Allstate||4.2||Best Local Service||Service in all states except Florida, Michigan, New York|
*Accurate as of publication date.
**Only available for military members, veterans, and their immediate family members.
As you can see, it can be harder to find rideshare insurance in some states than in others. To find the cheapest rideshare coverage in your area, you’ll want to compare quotes from multiple insurance providers. You can get started using the free tool below.
In an effort to provide accurate and unbiased information to consumers, our expert review team collects data from dozens of auto insurance providers to formulate rankings of the best insurers. Companies receive a score in each of the following categories, as well as an overall weighted score out of 5.0 stars.
- Industry Standing: Insurers with strong financial ratings and customer-first business practices receive the highest scores in this category.
- Availability: We consider availability by state as well as exclusions for specific groups of drivers.
- Coverage: This rating is based on types of insurance available, maximum coverage limits, and add-on policies.
- Cost and Discounts: Our research team reviews sample quotes for a variety of drivers in every state. Companies with lower prices and many car insurance discount opportunities receive the best scores.
- Customer Service: We comb through customer reviews and consumer feedback studies from experts like J.D. Power.
- Technology: Auto insurers with mobile apps, advanced online services and telematics are more likely to meet consumer needs.