Do You Need Rideshare Insurance?

by IST

Driving for Uber, Lyft or other rideshare industry gigs has become a popular way  for people with a car to generate part time or fulltime income. It provides great flexability. In fact, full-time drivers $36,500 on average in 2018.

While the flexible hours and extra income is enticing for many, it’s important to consider all the factors before diving into a career with Uber or Lyft. These rideshare companies provide drivers with insurance coverage, but many drivers don’t realize that they aren’t fully covered from the time they get in their car to the time they hang up the keys.  There are GAPS in coverage and times when not covered.

If you’re just learning about rideshare insurance and not sure why you need it, it’s because as a rideshare driver, you need to be especially mindful about the risks and insurance limits in your state. There are many states where there isn’t an officially recognized rideshare insurance policy and, although you may still be covered by Uber/Lyft, your personal insurer may drop you for being a rideshare driver. You don’t want your income stream cut off before rent is due next month!

Why You Need A Rideshare Endorsement When Driving for A Rideshare Company.

Uber and Lyft only cover rideshare drivers during Periods 2 and 3. Period 2 starts once you accept a ride request and are en route to your passenger, and Period 3 starts once your passenger gets into your car.  However, when you’re online and driving around or waiting for a request during Period 1, you have no collision coverage from Uber or Lyft and much lower liability limits. In the other periods you are covered but Lyft and Uber have $2500 and $1000 deductibles.

To put into perspective a rideshare endorsement costs around $5 – $20 a month for drivers with good profiles – no accidents or tickets, etc..  One loss with the higher deductibles or no coverage would have paid for years of insurance.  As a rideshare driver, you’re most at risk during Period 1 since you won’t get any collision coverage from rideshare companies and your personal insurer likely won’t cover you during this time either.

Rideshare insurance is typically purchased as an endorsement to a personal auto policy – if the carrier offers the coverage. Many insurers don’t offer coverage and will likely cancel you if there is an accident. Most insurers now ask whether or not you are driving for a rideshare company.  Excluding or answering incorrectly is misrepresentation of material facts. So, driving without an endorsement just doesn’t make sense.

The good news is rideshare insurance isn’t expensive. It covers gaps in coverage and keeps drivers protected even before they begin their first trip.

Many times reviewing your insurance policy can lead to not only the right coverage but lower costs too.  It’s wise to check.

The Insurance Specialists Team represents many insurance companies that offer rideshare insurance.  They have rideshare and transprotation insurance specialsts to help you get covered properly and they know how to get all and any discounts. It’s an easy one stop shop.

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