Finding the Best Ridesharing Insurance for You

Finding the Best Ridesharing Insurance for You
(And how you can easily get started today)

You’ve decided to transform your car into your own personal taxi service, which means transporting lots of different people all across town. Having good driving skills and working child locks isn’t enough to keep your passengers safe, though. 

Whether you’re working for Uber, Lyft, or any other ridesharing service, you’ll need a special kind of insurance coverage before you get movin’.

When it comes to transporting the public in your personal car in exchange for pay, having ridesharing insurance is the key to helping your rides and your business run smoothly. 

Sharing your vehicle may be rewarding, but it also comes with a host of risks. Our independent insurance agents are here to help get you set up with the right ridesharing coverage for your specific needs. But first, let’s start with an overview.

What Is Ridesharing Insurance?

Boiled down, ridesharing insurance is a policy designed to cover drivers who share their personal vehicles with other riders as a paid service. 

Personal auto insurance policies will not cover drivers once they have picked up a paying passenger, so getting the right kind of coverage is crucial for rideshare drivers to help protect themselves, their vehicle, and their riders.

Once you activate your rideshare app, you also activate an exclusion in your personal auto insurance policy—and it stops covering you. Ridesharing insurance is basically a hybrid policy designed to fill in the gaps of your personal auto coverage and the coverage provided by your rideshare employer.

Not all kinds of car insurance cover ridesharing—in fact, many don’t. That’s why it’s so important to work with an independent insurance agent to find the right kind of policy.

What Does Ridesharing Insurance Cover?

First we’ll first have to explain how the ridesharing business’s schedule is chunked. Different phases of ridesharing jobs are referred to as “periods,” and each is associated with its own level of coverage through your personal auto insurance policy, your ridesharing policy, or the ridesharing company’s coverage.

Before you activate the ridesharing app and start cruising for customers, your personal auto insurance policy completely covers you. While you’re on the job, however, rideshare coverage periods are defined as the following:

  • Period 1: You’ve got the app on, and now you’re driving around, waiting for someone to request you.
  • Period 2: You’ve received a ride request notification (hooray!), and you’re off to the rescue.
  • Period 3: The riders are in your car, and you’re all en route from point A to B.

Now that you understand how the coverage schedule is laid out, here’s the breakdown of what coverage looks like for each period:

  • Period 1: You’ve switched on the app, so your personal auto insurance policy no longer covers you. Uber’s and Lyft’s coverage is severely limited, to liability only. If you get into an accident during this phase of your work day or night, your ridesharing policy will fill in the gap between your personal auto policy and the rideshare employer’s coverage. The rideshare policy can provide coverage for things like property damage, vehicle repairs, and medical expenses if you’re injured.
  • Periods 2 and 3: From the time you’re summoned by a rider throughout their journey in your back seat, your rideshare employer’s policy is in full effect. Both Uber and Lyft offer up to $1 million in liability coverage and will match your car’s total value in a collision, if your personal auto policy also provides collision coverage. However, Uber has a comprehensive and collision deductible of $1,000, while Lyft’s is $2,500.

Does an Uber or Lyft Driver Need Ridesharing Insurance?

he short answer is: yes. Because of the gap between personal auto insurance coverage and rideshare company policies during Period 1, drivers can wind up in a lot of trouble if they don’t have additional coverage. Basically, it’s those potential risks that may arise during Period 1 that make ridesharing insurance crucial.

There’s no telling what could happen when the clock starts ticking and you’re on the move looking for business. Whether it’s a danger-junky of an animal that darts out into the road, a negligent drunk driver who swerves into you, or any number of unforeseen catastrophes, rideshare coverage can protect you.

How Much Does Ridesharing Insurance Cost?

Unfortunately, it’s hard to say. For starters, cost depends heavily on the insurance provider. Some policies offer ridesharing coverage for $15/month, while some offer comparative coverage for as low as $15/year

Still other insurance providers are set up differently, and will charge a percentage (typically 15%-20%) of your personal auto policy’s premium for the extra rideshare coverage.

Of course, it’s hard to offer an average figure, since policies differ so greatly. But really, coverage costs also depend on a number of other factors, like:

  • The value of your car: The fancier your car, typically the higher its total value. More expensive vehicles will cost more to repair or replace, so coverage is often pricier.
  • Your driving record: The more . . . colorful your driving history, the more you’re likely to pay for any kind of auto insurance. Simple as that.
  • Your location: It’s true, your location even affects the cost of your car insurance. Busy cities and other areas with high crime and claims records charge higher premiums for coverage. In order to find out exactly how much your ridesharing coverage will cost, you’ll need to get quotes for the specific city you’ll be working in.

How To Find the Best Ridesharing Insurance

In order to get the protection you need (and deserve), you’ll want to work with a trusted expert. Independent insurance agents will not only know where to find the best coverage and price, but also help to make sense of the fine print.

Consider your unique needs, then connect with an agent to help you take it from there. Have a list of your specific concerns and desires handy before you reach out, to help make the process even smoother.


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