disoriented drivers wearing facemask
Working as a rideshare driver is a great way to increase your income, whether you’re doing it as your primary job or on the side. However, before you start driving for Uber or Lyft, make sure you have the right insurance coverage. Spending many long hours on the road can increase the risk that you will suffer an accident–and the funds needed to fix your vehicle could quickly eat into the profits you’ve made driving. Checking your insurance coverage can help you ensure that you can successfully navigate any challenges that come your way.

Traditional Insurance Options can Leave Coverage Gaps

Both Uber and Lyft provide insurance through their platforms that can help protect you if you cause an accident, have an accident with an uninsured driver, or have an accident with an underinsured driver. Most drivers also carry personal liability insurance that will help protect them if they cause an accident with serious injuries. Nevertheless, if you carry only traditional insurance, or if you rely on your rideshare company’s coverage alone, you may find yourself with expensive coverage gaps that could eat into your profits and leave you struggling financially if an accident occurs.

Personal Auto Insurance

Most personal auto insurance will not cover you while you drive for profit. If you work as a rideshare driver, chances are, your personal insurance coverage will not cover any damage caused:
  • While the app is on and you are waiting for a rider
  • While you go to pick up a rider
  • While you drive with a rider in your vehicle
Your private insurance typically only offers compensation for an accident that occurs while you drive for personal use.

Rideshare Insurance Through Uber and Lyft

Both Uber and Lyft recognize that accidents can happen quickly, with little or nothing the driver can do to prevent it. They want to provide both their drivers and the passengers in the vehicles with adequate coverage when an accident occurs. However, they offer less protection while the driver waits to pick up a rider. Uber and Lyft insurance both provide relatively limited coverage once the driver turns the app on, but before you have a rider in the vehicle. Sometimes, this poses relatively little challenge, especially if you choose not to drive around until you have a passenger. Sometimes, on the other hand, drivers choose to cruise around while waiting to pick up a rider: to help time pass, for example, or to get closer to areas where people are most likely to request a driver. During that time, your personal auto insurance may also fail to offer adequate coverage for your needs. In addition, Uber and Lyft do have a deductible that you will have to pay for damage to your vehicle: $1,000 for Uber and $2,500 for Lyft. That could represent a lot of hours behind the wheel, especially if you drive during non-peak times!

Utilizing Specific Rideshare Coverage

Some insurance companies now offer specific insurance for rideshare drivers, delivery drivers, and others who utilize their personal vehicle for work purposes, but without direct insurance through the company.

Rideshare Coverage Takes the Place of Your Personal Auto Insurance Policy

When you take out a rideshare policy, you do not have to carry both rideshare insurance and your usual personal liability insurance policy. Instead, your rideshare insurance policy will take the place of your previous policy and provide you with the coverage you need regardless of what you’re doing in your vehicle.

Rideshare Coverage May Increase Your Insurance Costs

When you drive for a living, you may spend more time on the road, drive to more unfamiliar areas, and have more distractions–notably Uber and Lyft passengers, many of whom may be inebriated, excited, or otherwise deeply distracting while you try to drive safely. You may, as a result, have a higher risk of causing an accident than a driver who drives only for personal reasons. Your rideshare coverage may increase the cost of your insurance–but it will also increase the coverage you have in the event of an accident. Some rideshare policies offer much lower deductibles and will provide the coverage you need to repair your vehicle in the event of an accident.

Knowing Who Can Drive Your Vehicles

In general, once you take out an insurance policy on your vehicle, including a rideshare policy, both you and the family members who reside in your immediate household can drive the vehicle and receive coverage. If a specific individual in your home drives that vehicle on a regular basis, especially for commercial purposes–including working as a rideshare driver–you should list that individual on your policy.

Do I Have to Have Rideshare Coverage?

Legally speaking, you may have the right to drive without rideshare insurance, especially if you already have personal auto insurance. However, your rideshare activities may invalidate your personal insurance coverage–and if you drive during the waiting period after you turn on the app, but before you have a rider and head off to pick them up, you may not have the coverage you need if you get into an accident. If you choose to work as a rideshare driver, contact your insurance company to discuss your options. Often, your insurance agent will be able to tell you about the type of insurance you need and how much coverage it will provide, including how much coverage you may receive from Uber or Lyft in an accident. Furthermore, you can use that conversation to help you determine whether working as a rideshare driver is a cost-effective strategy that will really help you earn more money, or if it will turn out to cost more than you can gain once you factor in extra insurance along with gas costs. Did you get into an accident as a rideshare driver? Do you need a deeper understanding of the coverage you have for your accident? Whether you had an Uber accident or a Lyft accident, Cambre & Associates, LLC can help. Contact us today to learn more about your right to compensation.