Rideshare insurance: What is it and who needs it?

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Personal auto policies don’t include rideshare insurance. This is something you should consider if your company uses Uber and Lyft as drivers. It is common to believe that rideshare insurance is not covered by your employer-provided car insurance or any other commercial insurance. This is because you may need it when you pick up passengers and take them to their destinations for cash.

If you’re a rideshare driver and you don’t have standard coverage from your employer, you might consider getting additional rideshare insurance through a private company. Bankrate looked at the mechanics of rideshare insurance and suggested that you might consider supplemental coverage.

What is rideshare insurance?

A rideshare insurance policy is a form of car insurance that bridges the gap between your personal car insurance and the commercial car insurance policy offered by your rideshare company. Individual policies don’t cover transporting paying customers from one place to another. Employer-provided policies usually only cover the minimum, with restrictions about when you can be covered. Lyft and Uber driver insurance do not provide additional coverage for injured passengers outside of the window.

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Although rideshare drivers do not have to buy additional coverage, they may choose to add rideshare insurance to protect themselves and others from injuries or damage. Because rideshare drivers drive because it is their livelihood, it makes sense to invest in more coverage than the average commuter.

Rideshare insurance is important for Uber and Lyft drivers

It may be a smart idea to buy rideshare insurance if your job involves driving customers to their destinations. Rideshare insurance offers additional protection that will keep you financially secure, even if your auto policies are not commercially or personal.

Employer insurance policies don’t cover rideshare drivers from beginning to end. A rideshare employer’s insurance policy typically covers you and your vehicle only while you pick up or drop off customers. Uber and Lyft are two examples of ridesharing companies that divide coverage into the following categories.

  • Offline: If you’re not connected to your rideshare driver app or using your car for personal business purposes, commercial car insurance offered by Uber and Lyft does not cover you. Your personal car insurance policy usually covers offline driving.
  • Period 1 – Waiting for a Request: If your rideshare company logs you in, but has not assigned you a customer, you will be ineligible to employer-provided insurance coverage. Your personal insurance will likely be inactive as you are technically working during this period. This creates a gap in your insurance coverage and leaves you and your car financially vulnerable in the event of an accident.
  • Period 2 – Driving to Pick up a Customer: Once you accept a customer, your commercial insurance kicks into effect. Rideshare companies only provide limited liability insurance, so you may not be covered for this time. Lyft and Uber driver insurance offer bodily injury coverage for $50,000 each, $100,000 per incident bodily injury coverage, and $25,000 property damage coverage.
  • Period 3 – Ride in Progress: You are covered by your commercial auto insurance after you pick up your customer and for the duration. You will be relegated to period one after you drop off your customer. This is where you are unlikely to qualify for your employer-provided or personal insurance coverage.
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These are the top rideshare insurance providers

Many insurance companies offer rideshare insurance coverage. A rideshare insurance policy can be similar to your auto insurance policy. Some companies offer a rideshare endorsement that you can add to your personal car insurance policy. For additional coverage, certain insurance companies can add a TNC extension to your car insurance policy (Transportation Network Company).

These companies and their coverage options are some of the best providers of rideshare insurance, according to Bankrate’s research. Remember that rideshare insurance coverage costs may differ depending on the company you choose and that rates advertised could change.

Rideshare insurance is not available everywhere. It’s important to compare the offerings to see if you have any options. You might consider buying commercial insurance if you are in a state that does not offer rideshare insurance. This will ensure your financial security.

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Allstate

  • Types of coverage: Ride for Hire endorsement
  • Available States: Alabama, Arkansas. Arizona, California. Colorado, Connecticut. Delaware, Georgia. Hawaii, Idaho. Iowa. Illinois. Indiana. Kansas. Kentucky. Louisiana. Massachusetts. Maryland. Minnesota. Mississippi. Montana. North Carolina. North Dakota. Nebraska. New Hampshire. New Jersey. New Mexico. Nevada. Ohio. Oklahoma. Pennsylvania. Rhode Island. South Carolina. Tennessee. Texas. Utah. Virginia. Vermont. Washington. Wisconsin. West Virginia. Wyoming. Washington D.C.
  • Carrier’s estimated cost plus personal policy premium: $15-20 annually

Geico

  • Type of coverage: Ridesharing Policy replaces personal insurance
  • States available: Alabama and Arizona, Arkansas. California, Colorado. Connecticut. Delaware. Florida, Hawaii. Idaho. Illinois. Indiana. Iowa. Kansas. Louisiana. Maine. Maryland. Massachusetts. Minnesota. Mississippi. Missouri. Montana. Nebraska. North Dakota. Ohio. Oklahoma. Rhode Island. South Carolina. South Dakota. Tennessee. Vermont. Virginia. Washington. West Virginia. Wisconsin.
  • Carrier’s estimated cost plus personal policy premium: $25 per Month

State Farm

  • Types of coverage: Transportation Network Company (TNC), Driver Coverage endorsement
  • Available States: Alabama, Arizona and Arkansas, California. Colorado, Connecticut. Delaware, Florida. Georgia. Idaho. Indiana. Iowa. Kansas. Louisiana. Maine. Maryland. Michigan. Minnesota. Mississippi. Missouri. Montana. Nebraska. Nevada. New Hampshire. New Jersey. New Mexico. North Dakota. Ohio. Oklahoma. Oregon. South Carolina. Tennessee. Texas. Utah. Vermont. Virginia. Washington, DC. West Virginia. Wisconsin.
  • Carrier’s estimated cost plus personal policy premium: 15-20% higher than annual premium
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Farmers

  • Types of coverage: Rideshare endorsement
  • Available States: Alabama, Arizona and Arkansas, California. Colorado, Delaware. DC, Florida. Georgia. Hawaii. Idaho. Illinois. Indiana. Iowa. Kansas. Maryland. Michigan. Minnesota. Missouri. Montana. Nebraska. Nevada. New Jersey. New Mexico. North Dakota. Ohio. Oklahoma. Oregon. South Dakota. Tennessee. Texas. Utah. Virginia. West Virginia.
  • Carrier’s estimated cost plus personal policy premium: $15 per mois, 8% in California

USAA (only for US military personnel, veterans, and their immediate families)

  • Types of coverage: Rideshare gap coverage is an endorsement to an existing personal insurance
  • Available States: Alabama, Arizona and Arkansas, California. Colorado, Connecticut. District of Columbia. Delaware, Florida. Georgia. Idaho. Iowa. Illinois. Indiana. Kansas. Kentucky. Louisiana. Massachusetts. Maryland. Minnesota. Missouri. Mississippi. North Dakota. Nebraska. New Hampshire. New Jersey. Nevada. Ohio. Oklahoma. Tennessee. Texas. Utah. Vermont. Washington. West Virginia. Wisconsin.
  • Carrier’s estimated cost plus personal policy premium $6-$8 per Month

Progressive

  • Types of coverage: Rideshare endorsement
  • Available States: Alabama, Arizona and Arkansas, Colorado. Florida, Georgia. Idaho. Illinois. Indiana. Iowa. Kentucky. Louisiana. Mississippi. Mississippi. Missouri. Nebraska. New Mexico. North Dakota. Ohio. Oklahoma. Pennsylvania. Rhode Island. South Dakota. Tennessee. Texas. Utah. Virginia. Washington, Washington D.C. West Virginia. Wisconsin.
  • Carrier’s estimated cost and personal premium: Based on the miles you drive while driving a rideshare vehicle
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Mercury

  • Types of coverage: Standalone rideshare policy
  • States available: Arizona, Georgia, Illinois, Nevada, New Jersey, New York, Oklahoma, Texas, Virginia
  • Carrier’s estimated cost plus personal policy premium: Starting at $0.90/day

Esurance

  • Types of coverage: Standalone rideshare policy
  • States available: California, Illinois, New Jersey
  • Carrier’s estimated cost and personal premium: Based on the miles you drive while driving a rideshare vehicle

Travelers

  • Types of coverage: Rideshare endorsement
  • States available: Colorado, Illinois
  • Carrier’s estimated cost and personal premium: Based on the miles you drive while driving a rideshare vehicle

What is the cost of rideshare insurance?

Because rideshare insurance costs vary by state and company, it is difficult to establish a standard price. Additionally, any car insurance premium is affected by rate factors, such as driving history, geographic location, claims history, the age of your car and more. It also depends on the type of policy you have. A standalone rideshare policy is likely to be more costly than one that you have as an add-on. To find out your exact rates, contact companies offering rideshare insurance in your area.

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How to purchase rideshare insurance

Some car insurance companies allow you to extend your personal insurance policy or add a new TNC policy through their websites or online portals. Farmers is one example of an insurance company that requires you to contact an agent. Your insurer will need to know that you are a rideshare driver when discussing your coverage options. Based on your driving record, location and personal information, they will give you a customized quote. To get the best price, it’s a smart idea to compare prices from different providers.

Questions frequently asked

Do I have to inform my car insurance company I’m driving for Uber/Lyft?

Imagine that your car insurance policy is to cover you from the beginning of your workday through the end. You should tell your auto insurance provider you are a rideshare driver to enable you to add endorsements or buy a separate policy if necessary.

What happens if rideshare insurance doesn’t exist in my state

Consider purchasing commercial insurance if rideshare insurance is not an option for you. Although commercial policies can be more costly, they will provide sufficient coverage to protect your finances.

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Are there additional rideshare insurance requirements if I have existing policies from my employer and personal?

You can still be vulnerable even with your employer-provided and personal insurance. Rideshare insurance bridges that gap, protecting you even when you’re not transporting customers.

Do contract delivery drivers need rideshare insurance?

Contract delivery drivers often look a lot like rideshare drivers when it comes to car insurance. Your personal car insurance will only cover you for certain times if you deliver food to a service such as Uber Eats or GrubHub. You might be covered while you drive to a restaurant to pick-up an order, but not while you log into the app to wait to take it. To protect your finances, it might be a good idea to purchase rideshare insurance if you are a delivery driver. If you’re a delivery driver, speak with your insurance agent to find out if you require rideshare insurance.

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