Before driving for a rideshare company like Uber or Lyft, you want to ensure you have sufficient car insurance in place. Your personal auto insurance policy typically doesn’t cover you while driving for a rideshare service.
Standard auto insurance policies usually stop covering you once you log into the rideshare app and rideshare company coverage can be inadequate. Rideshare companies provide some insurance when using the app and transporting passengers, but you may want more coverage. Rideshare insurance can help bridge the coverage gap, ensuring complete coverage.
What Is Rideshare Insurance?
When you drive for a rideshare company like Uber or Lyft, rideshare insurance covers you and your car while using the app. Even though the law requires rideshare companies to provide coverage to their drivers, it may not be enough: Insurance from the rideshare company typically only provides liability coverage while you’re waiting for a ride request.
Liability insurance only pays for injuries and damage you cause to others. If your car gets damaged in an accident while you’re waiting for a ride request, you may have to pay out-of-pocket for repairs and medical expenses if you don’t have rideshare coverage as part of your personal auto insurance policy.
Some car insurance companies offer a rideshare coverage endorsement, which you can add to your auto policy. The rideshare endorsement bridges the coverage gap between the rideshare company’s insurance and the driver’s personal car insurance.
How to Find the Best Rideshare Insurance
When you buy any insurance policy, it’s smart to shop around to find the best coverage at a reasonable price. The same is true if you’re shopping around for car insurance with a rideshare endorsement.
Understand What Your Personal Car Insurance Covers
To understand what your personal car insurance covers (and doesn’t cover), first be familiar with the different stages of rideshare driving.
- Stage 1 (Available): Your rideshare app is on, and you’re available to pick up passengers.
- Stage 2 (En route): You’ve accepted a passenger’s ride request and are going to pick them up.
- Stage 3 (On the trip): You have a passenger in the car heading to their destination.
During stage 1, your personal insurance no longer applies and the rideshare company’s insurance kicks in. Companies like Uber and Lyft usually offer only liability coverage at this stage. If you cause a car accident, auto liability insurance will pay for the other driver’s expenses, including property damage and injuries, but not your own.
Insurance from the rideshare company during Stage 1 does not include collision or comprehensive insurance.
During stages 2 and 3, your rideshare company usually provides higher liability limits and additional coverage of:
- Uninsured/underinsured motorist liability coverage pays for any injuries sustained by both you (the rideshare driver) and your passengers if the other driver was at fault and either wasn’t insured or didn’t have enough coverage to cover the costs.
- Contingent collision and comprehensive coverages pay for damage to your vehicle if you’re in an accident or it is stolen, vandalized or damaged by severe weather, falling objects or striking an animal. For the rideshare company to apply this coverage, you must have collision and comprehensive coverage on your personal auto policy.
This extra insurance from the rideshare company may seem like enough, but there are coverage gaps that can leave you vulnerable.
For example, you need collision and comprehensive coverage to protect your car while waiting for a ride request. That’s where rideshare insurance is beneficial: It extends these coverages from your personal policy during stage 1.
Get Quotes From Multiple Car Insurance Companies
When looking for the best rideshare insurance, getting car insurance quotes from at least three different companies is a good idea. Each insurer has its way of figuring out how much to charge for rideshare insurance coverage. Comparing quotes will help you find the cheapest policy that still gives you the protection you need.
Price is one of many factors you should consider when shopping for the best rideshare insurance. You’ll also want to think about factors like:
- Extra savings opportunities, such as car insurance discounts for paying your bill in full or bundling multiple policies like auto and home.
- Satisfaction ratings to make sure the company has good customer and claims service.
Apply For a Car Insurance Policy
After finding a suitable policy, you’ll want to apply for coverage. This may involve filling out an online application, speaking with an agent or providing documentation about your rideshare driving.
Once your application is approved, you can purchase a policy to activate your coverage.
Insurance Companies That Offer Rideshare Insurance
Allstate, American Family, Farmers, State Farm and Travelers are some of the car insurance companies that offer rideshare insurance. Coverage details can vary by company, as does the name of the coverage. Look for rideshare insurance or ”transportation network company (TNC) insurance.”
Examples of Rideshare Insurance Policy Endorsements
| Company | What it covers |
|---|---|
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Covers the time when you’re waiting for a ride request and pays the rideshare company’s deductible up to $2,500 if you crash while you’re en route or on a trip
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Covers when the rideshare app is on and waiting for a trip request
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Covers when the app is on and you’re waiting for a trip request
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Covers when the app is on and waiting for a ride request and when transporting a rider (though the latter doesn’t include liability coverage)
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Covers when the app is on and you’re waiting for a request
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Who Needs Rideshare Insurance?
Anyone who drives for a rideshare company can possibly benefit from rideshare insurance if you have gaps in coverage.
The main gap typically occurs when the app is on and you’re waiting for a trip request—as you usually have only liability coverage from the rideshare company but no coverage from your personal auto policy. Rideshare drivers who want comprehensive and collision coverage during this time should consider rideshare insurance.
What Does Rideshare Insurance Cover?
Rideshare insurance usually includes many of the same coverage types you get with a full coverage auto insurance policy, such as:
- Liability insurance: Car insurance liability consists of bodily injury liability insurance and property damage liability insurance and pays for injuries and property damage you accidentally cause others in a car accident.
- Medical payments (MedPay): Medical payments coverage pays your medical bills if you’re in an auto accident, no matter who caused the accident.
- Personal injury protection (PIP): Similar to MedPay, personal injury protection pays for your medical expenses if you’re in an auto accident, regardless of fault, but also comes with coverage for lost wages and replacement services for household tasks you cannot do because of your injury.
- Uninsured/underinsured motorist coverage: Uninsured motorist coverage pays for your medical expenses if a driver who doesn’t have car insurance crashes into you, and underinsured motorist pays if the driver had some, but not enough, insurance.
- Collision and comprehensive insurance: Collision insurance pays for damages or the total loss of your car due to an accident with another vehicle or object. Comprehensive insurance pays if your car is stolen, vandalized or damaged by severe weather, floods, hail, falling objects or striking an animal.
Rideshare insurance essentially extends the coverage types of your personal auto policy so they are in force when you have your rideshare app on and you’re waiting for a ride request.
The best rideshare insurance will also pay the difference between your personal collision deductible and the rideshare company’s deductible amount if you’re in an accident while you’re en route to pick up a passenger or are driving the passenger to their destination.
How Much Does Rideshare Insurance Cost?
Adding a rideshare endorsement adds 15% to 20% to your auto insurance policy, according to State Farm. The cost of rideshare insurance depends on the type of policy and coverage limits you choose, and other common car insurance ratings factors like:
- Your vehicle’s make and model.
- The state you live in.
- Your driving history.
- Your current auto coverages and policy limits.
- The insurance provider.
If you purchase a separate rideshare policy that combines personal and business insurance, the cost is usually higher than adding an endorsement.
Is Rideshare Insurance Worth It?
Rideshare insurance may be worth it if you have gaps between your personal auto insurance and your rideshare company’s coverage.
If you don’t have a rideshare endorsement, your personal policy “may not cover damage to your own vehicle or pay for any injuries you received due to a covered accident,” says Bronwyn Koopman, head of auto product for Farmers Insurance.
“While all states in the U.S. require transportation network companies (i.e., Uber, Lyft, etc.) to provide their drivers a certain amount of liability coverage to cover certain portions of the rideshare experience, rideshare drivers may find there is still a coverage gap between what the TNC policy covers and what is covered by their own personal auto insurance coverage,” Koopman says.
If you’re driving for a rideshare company, it’s wise to speak with an insurance agent about your rideshare endorsement options.
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