If you’ve been driving rideshare with Uber or Lyft for a while, you may have come across the topic of rideshare insurance. It is a complex topic with many facets that can often leave you bewildered.
Beyond the basics of carrying your own auto insurance policy, you also need to consider the insurance coverage of the rideshare company you drive for. It’s important to weigh the benefit of carrying a rideshare policy yourself. Now, before you start hitting the panic button, take a breath. There is a reason we at Uber Driver Things have prepped this ultimate guide to insurance options for rideshare drivers.
Why? We believe it is critical for you to have this information.
As a driver who was not prepared to deal with insurance companies and the complexity of rideshare driving, I can attest that you will want to pull up a seat and grab a pen and paper. The thing is, it’s not a complicated process if you take preventative action. But if you sleep on this, you will pay for it in the long run. First, we need to define a few things. It’s essential to understand the different levels of coverage available. Next, we need to figure what each level of coverage entails for rideshare drivers.
History of Rideshare and Auto Insurance
Ever since the emerging of the major Transportation Network Companies or TNC’s like Uber, Lyft, Via, and dozens more, insurance has been a critical consideration. For a long time, many drivers were covered by the one-two punch of personal auto coverage and the umbrella coverage of the rideshare company they drive for. This worked for some time until insurance companies got wise to the fact that they stood to lose money. After insurance carriers suddenly dropped hundreds —if not thousands— of drivers, it gave issue to the advent of rideshare insurance.
Personal Auto Insurance
Let’s take a minute to talk about your personal auto policy. One would think, well, it’s my car. I can use it how I want to. Well, that would be nice, but it is not accurate. In fact, if you have not reported to your insurance company that you are currently or plan to use the vehicle for rideshare, you run the risk of being dropped. Letting your insurance company know you’re doing rideshare is one of the first things you need to do to treat your rideshare as a business and protect yourself.
Why? Well, because of the added time on the road, the risk of an accident or a loss of property goes up, significantly.
You need to be 100% sure and 100% prepared should the accident grim reaper show up. Look, we are all going to bang into something sooner rather than later and your personal auto policy —while functional for your daily commute— will not cover your rideshare gig the way you expect it to.
Key Periods of Coverage
One would think that rideshare is so deceptively simple that insurance might follow suit. No, it’s not. But we can break it down into discernible chunks that allow us to see when we, as rideshare drivers, are covered and by which insurance company.
I’m not going to go into detail on at-fault vs. not-at-fault because that complicates the matter exponentially and I am not a legal guru. However, I do think it is critical to know who your primary point of contact is going to be should you get into an accident. The way to break this down is by periods that follow as Period 0, 1, 2, and 3.
This is when you are driving your own vehicle, and you are not driving rideshare. In fact, you don’t even have the app on. Maybe you are going to work, picking up the kids from school, or just going on a grocery run. It is instances like these where your personal auto policy is in full effect, and where it is at its full power or potential.
Now, once you open the Uber or Lyft app and you hit “Go Online,” the insurance company that covers the ride switches. Most likely, your personal auto policy immediately deactivates in this very moment, leaving you 100% vulnerable. Why? Because even the Uber or Lyft umbrella policy doesn’t cover this time.
I bet you didn’t know you’ve been driving around waiting to receive a ride you were basically a sitting duck. This is the primary gap in which rideshare insurance fits in.
Once you receive a request on the app and you accept it, you are automatically switched into what is known as Period 2. It covers you from the time you accept a request until the time that you pick up and begin the ride.
Under Period 2, the insurance company that covers your drive is that of the TNC. Here, you are offered increased coverage often far beyond your standard auto policy. I can speak from experience, their insurance covers. It is in this period where there is a joint or unified effort of coverage between your personal auto policy and the umbrella policy.
As soon as you pick up the rider, you move into what is called Period 3. In this segment of your journey, your TNC insurance company fully covers you under their enhanced commercial policy.
Protection for the Gap in Period 1
As we went through the periods, we noted a significant gap that rideshare drivers used to be virtually screwed in. What is the answer? Well, rideshare insurance is!
These policies are critical to your survival as a rideshare driver, particularly if you own your ride. Drivers who lease or rent vehicles to do rideshare are often covered 100% by their leasing company and are not generally required to carry rideshare insurance.
Understanding Rideshare Insurance
Rideshare insurance is a type of car insurance coverage available to rideshare drivers. Also called gap insurance, it covers the lapse in coverage that happens in Period 1.
Doesn’t My Personal Auto Insurance Cover Me Though?
You might think that with all the money we pay out for car insurance, this silly gap wouldn’t exist, but it does.
Anyone who has ever dealt with an insurance company knows that the one thing they don’t do is give out money easily. That is why all rideshare drivers need to carry a rideshare policy on top of their personal auto policy.
There are several reasons your personal auto coverage won’t cover you. If you have not declared to them that you are driving rideshare, they will drop you if they find out and they certainly won’t cover you.
Why Won’t They?
If you’re using your car for commercial purposes, the insurance company has little choice but to increase the cost of your premiums.
Here are three key factors that increase the cost of coverage for your personal auto insurance carrier.
- Rideshare drivers are often on the road far longer than an average driver. More hours on the road creates a higher risk that the driver will be in an accident.
- Many rideshare drivers work more than forty-five hours a week, thereby increasing the factor of fatigue. This can drastically increase their cost risk.
- The life and health of the rider are in the hands of the driver. Remember, rideshare drivers are in the service industry. As we provide services, we become responsible for any damage caused to other drivers or passengers should we get into an accident.
Before and After Rideshare Insurance
The history of rideshare, no matter how brief it has been, is full of reports of drivers being handcuffed after an accident. With rideshare insurance becoming more prevalent, you can assure yourself that when it happens, you are covered.
There really isn’t an excuse anymore for drivers. You definitely need to get rideshare insurance just as much as you need to track your mileage or gas up if you want to continue driving for your chosen rideshare company.
Listen, the costs of accidents and fines are high. They become even higher when you have to foot the bill because you didn’t want to fork over the added costs of rideshare insurance.
The good news? Rideshare insurance is now widely available and 100% affordable. Do you know what is not affordable? Not having it!
How to Get Rideshare Insurance?
So, you might be asking where do I sign up? It’s best to call your personal auto insurance carrier and ask them if they offer rideshare insurance.
If you are already driving rideshare but have not declared this to your insurance company, I urge caution. Go to their website and check their coverage map and policy. Check your policy and see if you already have it; although this is a rarity. The cost of upgrading to a rideshare coverage policy is minimal, so there isn’t much to worry about. Just be sure that you are getting a product that covers Period 1 —the time in between Going Online and Accepting a Ride.
How much you’re making as a rideshare driver shouldn’t be a reason for not getting rideshare insurance. I can assure you that you stand to lose more money if you don’t have any protection while you’re out driving.
Rideshare Insurance Options
Up until now, we have only really talked about rideshare insurance. That’s because you want to make sure to bundle these policies.
If you can bundle your personal auto coverage with rideshare insurance, you can often get a discount. Since you absolutely need to include a rideshare gap coverage, you might as well get one from your insurance company.
Not All Companies Offer Rideshare Insurance
There is one minor problem to consider. Not every insurance company will cover your rideshare side gig. But don’t worry, we’ve compiled a list of the most popular and most effective rideshare insurance providers available. We’ve even gone the extra mile and made sure they are available in your area.
Seven Popular Rideshare Insurance Companies
This list is by no means exhaustive, and your personal auto insurance carrier may have a rideshare insurance package. Be sure to do your due diligence and check with them first as there might be an excellent offer for you.
Companies in this list are generally accepted by most in the industry to offer the highest quality coverage over the most extensive areas. The average cost of most rideshare insurance policies is ADD IN COVERAGE AVERAGE. If you are looking to bundle, we recommend one of the following companies, should they be available in your area.
Remember, here at Uber Driver Things, we want to know about your experiences. If you’ve worked with any of the following companies, we want to know what it was like. Leave a comment below!
1. Allstate Auto
Not only is Allstate a trusted brand, but it offers a rideshare specific insurance policy called “Ride for Hire.” This policy aims to cover you in the Period 1 gap, where you are waiting for a passenger or commuting to retrieve one. The part that I really dig about this insurance policy is that it only adds $15 to $20 per year to your bill.
Think about it, $15 bucks or a lifetime of medical and property damage bills. It is a no brainer. Add in the fact that Ride for Hire also adds in a Period 3 gap protection to help cover any deductibles that you might have to pay through Uber or Lyft. This can drastically reduce your out of pocket expenses when it comes time to pay the piper.
One key consideration is that Ride for Hire works best when you bundle it with an existing Allstate Auto policy. If you add this policy onto your current personal auto coverage with another carrier, you run the risk of a lack of gap coverage.
Overall Cost: An additional $15 to $20 per year, it’s a darn steal!
State Coverage for Allstate: AL, AR, AZ, CA, CO, DC, DE, GA, HI, IA, ID, IL, IN, KS, KY, LA, MA, MD, ME, MN, MO, MS, MT, NE, ND, NH, NJ, NM, NV, OH, OK, RI, PA, SC, SD, TN, TX, UT, VA, VT, WA, WI, WV
2. Farmers Auto
Not only do they have one of my favorite commercial jingles, but their advertisements are pretty funny. Farmers Auto is a well known and reviewed auto insurance carrier in the business. I have heard some drivers say they love Farmers Auto.
Farmers Auto offers a rideshare gap insurance plan that covers the critical Period 1. It helps maintain coverage for your property, that being your car. Farmer’s rideshare insurance plan also doesn’t cost you an arm and a leg to add on At only $15 more per month in most states it is incredibly affordable.
There is a minor setback in the coverage with Farmer’s however as it does not cover anything that occurs after you pick up a rider. So from the time you pick up a passenger to the time that you drop them off Farmer’s is out and the coverage rolls over to the TNC carrier.
Overall Cost: An additional $15 per month in most states. Excluding California, where there is an 8% increase.
State Coverage for Farmers: AL, AR, AZ, CA, CO, GA, IA, ID, IL, IN, KS, MD, MI, MN, MO, MT, ND, NE, NJ, NM, NV, OH, OK, OR, PA, SD, TN, TX, UT, VA, WA, WI, WY
3. Safeco Auto
Safeco is a growing brand in many midwestern and western states. Their auto policies often come in far more inexpensive than the larger brands.
Their rideshare insurance is reasonably priced at around $10 per month. However, there isn’t much data available on what they promise to cover. Even the language on their website is rather rudimentary. It states that they cover you “nearly” as much as your personal auto coverage. For me, that is not sure enough, but hey if you are looking to save some pennies, Safeco has become a reputable brand.
Overall Cost: An additional $10 per month in the states in which they serve.
State Coverage for Safeco: AZ, CO, IL, IN, KS, MN, MS, OK, OR, TN, UT, WA, WI
4. Geico Auto
Geico is another major carrier of auto insurance that rideshare drivers can trust. Not only because they are an incredibly affordable option, but because they do step in when you need them to. Geico doesn’t offer a rideshare insurance add-on. However, they do offer what is called “hybrid” or “uniform” coverage. This means your personal auto policy covers everything from personal driving to rideshare driving.
Geico Auto does this at a premium often raising the auto coverage by $150 per year, but that isn’t terrible. They do this to ensure total coverage. This is one of the more complete options if you don’t mind paying the added price for Geico and their killer coverage. At $150 a year that is still below the $15 a month for Farmer’s
Geico makes sure to cover: property damage, bodily injury, collision, comprehensive physical damage, medical payments, and uninsured motorist coverage. They also cover the largest number of rideshare services.
There is, however, one major drawback to Geico. They have an annual mileage limit. Therefore, if you are a full-time driver, you may need to upgrade to a commercial insurance policy which is significantly more expensive.
Overall Cost: An additional $12.50 per month or $150 per year. However, the cost increases if you are over the mileage limit.
State Coverage for Geico: State coverage: AL, AR, AZ, CO, CT, DC, DE, FL, GA, IA, ID, IL, IN, KS, LA, MD, ME, MN, MO, MS, MT, NE, NM, ND, OH, OK, OR, PA, RI, SC, SD, TN, TX, VT, VA, WA, WV, WI, WY
5. Progressive Auto
Progressive Auto is a well-known brand name with solid coverage on the personal auto policy side of things. That said, there isn’t much information on their rideshare insurance or gap coverage policies. If you currently have insurance through Progressive, it might be worth a call to your local agent.
The general report from drivers online and that I have personally spoken to is that the premium jumps quite a bit. When you add in the lack of coverage area for Progressive, they come in a bit low on the value side. Currently, Progressive only offers rideshare or their gap insurance policy in Pennsylvania and Texas. This is not a plus for what appears to be commercial coverage at a premium price.
One bonus about Progressive is that they do a great job of illustrating and explaining exactly how rideshare insurance works. Check out the link below for a more detailed analysis and breakdown of insurance coverage and gaps.
Overall Cost: Is only available in a quote. Drivers state that it is on the higher side.
State Coverage for Progressive: AZ, CA, GA, IL, NV, OK, TX
6. State Farm Auto
Jake from State Farm may have put State Farm on the map for most people, and if you don’t get that joke, I feel sorry for you. State Farm has been a reliable partner to drivers for many years. I know from experience that their coverage does come at a premium. No pun intended.
State Farm does offer a rideshare or gap insurance plan for rideshare drivers, but the coverage is spotty. For instance, State Farm covers drivers from Period 0 to Period 3, but it will not cover drivers for liabilities to others. Add in the fact that State Farm has a slightly smaller coverage area for drivers, and that is why they come in a bit lower in overall driver value.
Overall Costs: An additional15 to 20 percent to a current premium. This can be a considerable amount if your cost on insurance is already high.
Stage Coverage for State Farm: AZ, CO, IL, IN, KS, MN, MS, OK, OR, TN, UT, WA, WI
7. USAA Auto
If you happen to be a veteran, I would recommend USAA and their coverage. Not only can you bundle in rideshare insurance with your existing policy, but it comes in at the super affordable cost starting at $6 per month.
This type of policy may not be a fit for everyone, however, for our brothers and sisters who served, this option beats all.
Overall Cost: An additional $6 per month for existing USAA members.
State Coverage for USAA: AZ, CA, CO, IL, MA, OH, TX, WA
Notable Mentions for Rideshare Insurance
These companies may not have made the list, but we have gathered their information here for you to do your own research. As I always say, don’t just take my word for it, do your due diligence and find out the path that works best for you.
1. Erie Auto Insurance
Erie’s business use coverage plan affords rideshare drivers a loophole. If you carry their business use coverage plan, you can acquire a decent gap coverage that could help you in the case of an accident.
Overall Cost: An additional $9 to $15 per month.
State Coverage for Erie Auto Insurance: IL, IN, KY, MD, OH, PA, TN, VA, WV, WI, and WA, DC
2. Mercury Ride-Hailing Insurance
It is a bit of an odd-ball policy, but it is not without its benefits. This unusual gap style insurance is designed to be super affordable for drivers. Mercury advertises that the costs can be as low as twenty cents per day for rideshare drivers. That is a huge win if it is indeed a reputable option. Their coverage map is on the smaller end. They are also a newer agency, so that is why they show up here in the notable mentions section.
Overall Cost: As low as twenty cents per day, as advertised by Mercury.
State Coverage for Mercury Ride-Hailing Insurance: AZ, CA, IL, NV, OK
What if I Can’t Get Rideshare Insurance in My Area?
Though many existing rideshare drivers live in urban areas, some drivers live outside coverage zones. If this is the case, you will need to look into acquiring a commercial auto insurance policy. This can be pricey, and you will need to weigh the cost-benefit of acquiring said policy.
Given the fact that many rural communities might be getting more and more rideshare demand, it may not be enough to cover the cost of insurance. Make sure to call your personal auto policy carrier and ask them for a quote.
What to Do if I’ve been in an Accident and Do Not Have Rideshare Insurance?
Well, everything will be a bit harder, depending on what Period you were in when the accident occurred. The best thing to do is to work with your personal auto coverage carrier and see if you can add the policy moving forward. The TNC auto policy will work for you in most cases. But for more information on what to do, check out our What to do when you’ve been in a Rideshare Accident Guide.
What are the TNC Coverage Details?
What if you are in an accident and the TNC is supposed to cover you? It is good to know what you are in for.
Here are the basic TNC Coverage limits for Uber and Lyft. Both rideshare companies use the James River Insurance company. I can attest that they cover the Periods and Gaps in which they are liable.
Period 1 Liability only
- $50,000 bodily injury per person.
- $100,000 bodily injury per accident.
- $25,000 property damage per accident.
Periods 2 and 3 Liability
- $1 million per incident.
- $1 million per incident.
Varies by state.
Comprehensive and collision
TNC will cover up to the value of your car if you also have comprehensive and collision coverages on your personal policy.
Comprehensive and collision deductible
Wrapping It All Up
Rideshare insurance can be tricky, and generally, a pain in the rear. However, you need to make sure to protect yourself. Do everything you can to ensure that you have reliable gap coverage — even if that means putting up tip and rating signs to bring home extra cash.
There are always situations in which coverage will lapse, but those are often unforeseen and rare. What is important is that you protect your rideshare business and your property by spending a slight increase in premium per month. I can assure you that trying to pay for medical bills and property damage post-accident is far more expensive. Any of the options listed above can provide you with a significant upgrade.
If you are unsure of which insurance works best for you, it is best to speak with a professional on the matter. At Uber Driver Things, we are drivers first and do not claim to be insurance gurus. I have done my due diligence to provide you with a complete guide to the Best Insurance Companies for Rideshare Drivers, but it is up to you to do the rest. Now, get yourself some rideshare insurance before you click Go Online!