If you have recently started a work gig driving for a company such as Lyft or Uber, capable rideshare insurance will provide you much-needed coverage if anything happens suddenly while on the job. The entity you’re employed with does offer some coverage, but it can end up very inadequate in the long run, and drivers could be faced with paying out-of-pocket for skyrocketing medical or repair bills. 

Rideshare insurance is an excellent choice for a worker who wants to effectively bridge the gap between their personal car insurance coverage and the frequently inadequate options offered by their employer. Before you enthusiastically clean your interior and get ready to pick up a new rider, here are some of the most important things to know. 

The Stages of Rideshare Driving

To fully understand the types of insurance for rideshare driving, it’s important to know the three phases one can be situated on while the rideshare app is ticking.

  • Available: The driver is ready and available to pick up a passenger.
  • En Route: The driver has accepted an assignment and is on the way to pick up the passenger.
  • On the Trip: The driver has picked up the passenger and is safely escorting them to their destination.

While your Uber or Lyft rideshare app is turned off, this drive time interval is covered by your personal auto insurance. Once your right shaft air is on and you’re working, Uber and Lyft provide some coverage. Every minute you’re behind the wheel, knowing the gaps between coverage is crucial to making sure that you are completing the job while properly protected. 

During the Available stage, both Uber and Lyft provide $50,000 in bodily injury coverage per person, and $100,000 in bodily injury coverage per accident. They also cover $25,000 in property damage coverage per incident.

During the En Route stage, Uber and Lyft offer $1 million third-party liability coverage and uninsured/underinsured motorist bodily injury coverage. They also provide contingent comprehensive and collision coverage up to the actual cash value of a car with $1000 deductible.

During the On the Trip stage, Uber and Lyft provide $1,000,000 in liability coverage, and uninsured/underinsured motorist bodily injury coverage. Once again, they also provide contingent comprehensive and collision coverage, up to the actual cash value of the car with a $1000 deductible. 

What Do These Terms Mean?

Here are some definitions of the terms related to insurance for drivers provided by rideshare companies. 

Third Party Liability Coverage pays for bodily injury and property damage caused by a third party in the event of a car accident. A third party is someone or something other than the driver themselves or their vehicle. If you as a rideshare driver collide with another car, auto liability insurance will make required payouts to the other driver.

Uninsured/Underinsured Motorist Bodily Injury Coverage will pay for injuries suffered by rideshare drivers and their riders if the accident occurs during an actual rideshare journey. If another driver is at fault and isn’t sufficiently covered, this type of coverage also applies. This coverage also will apply in the unfortunate case of a hit-and-run accident. The specific coverage limits provided by the rideshare insurance company vary depending on their state of residence.

Contingent Collision and Comprehensive Coverage are provided during the time that you embark on the trip to pick up a rider or have a rider in the car. The deductible reduces the potential claim payment while using this type of coverage. If you do not carry collision and comprehensive coverage on your personal vehicle, rideshare companies such as Uber and Lyft will not rise to the occasion and provide it either.

Is my Personal Insurance Policy Ever Adequate for Rideshare Work?

Personal auto coverage will typically not cover rideshare trips. The companies have priced your policy under the guise that you are driving yourself, any other relatives or acquaintances, and that you are generating revenue from the driving you are doing. Traditional car insurance is not efficiently set up for the liability and medical payment allocation that a driver exposes themselves to while getting paid to safely transport individuals. Personal car insurance policies all have a clause that clearly excludes commercial activities such as ride-sharing.

What Type of Insurance do Rideshare Drivers Need?

There are three main types of insurance every driver should consider. Comprehensive and collision coverage are the predominant types to be concerned with as you pursue ridesharing and viable income.

  • Liability: This type of coverage is mandatory in every state and takes care of injuries to any person or damage to their property after an accident for which you’re at fault. This type of coverage will never cover your own car or your injuries. Some states now mandate low limits that may not be adequate to fully cover damage or injuries to other drivers if an accident occurs. You must pay out of pocket to fill the gap, so it is a good idea to purchase additional liability coverage.
  • Collision/Comprehensive: If you have taken out an auto loan or car, your lender typically requires that you have this coverage in place. Collision coverage pays to repair or replace your vehicle if it is damaged in an accident. The comprehensive part of the policy covers car damage that is not related to said accident, such as a weather event or random vandalism. Some richer drivers will be tempted to skip this coverage, but that is not wise unless you’re prepared to pay outright for an entirely new vehicle.
  • Uninsured/underinsured motorist: If you are involved in an accident and the other driver is not covered, uninsured motorist insurance covers your needed medical expenses, along with those accompanying you on the ride. It also will cover lost wages, along with obligatory pain and suffering. If the driver who hits you has insurance with low coverage limits, underinsured coverage will cover the difference. When you are debating this type of coverage, it’s best to go with amounts that will match your own liability limits. 

Chauffeur Clients With Confidence: 

The cost of a functional rideshare endorsement or insurance policy varies depending on which company you choose. After looking at nationwide averages, a general rule is to expect an additional 15% to 20% added to your standard policyholders premium. It’s a good idea to sit down with us here at the Alexander Agency of Saint Charles, just to make sure you understand the full scope and outcome potential of what’s specifically covered by the policy you choose. Shield your rideshare journey and boost your economic outlook by contacting us today!