Do I Need Commercial Auto Insurance for Lyft or Uber?

Fran
Mary Kate Morrow
May 8, 2020

Whether or not it is the full responsibility of rideshare and food delivery workers to buy their own insurance coverage is an ongoing debate. And for the most part many rideshare companies do provide insurance, just not enough. There is one fact all parties can agree on, however, and that is that it’s always best to be upfront and honest about driving your personal car to generate income from a ridesharing company if you’re ever in an accident.

If you are not honest, you may be responsible for a hefty bill, and in some cases even legal prosecution. All of this will be compounded by your inability to get insured again! With such high stakes, ridesharers should consult with insurance experts to help decide if purchasing a rideshare insurance policy or commercial auto insurance is right for them. Here’s more.

How Do Uber and Lyft Cover Rideshare Drivers?

Although rideshare companies like Lyft and Uber offer some insurance coverage for their drivers, there are ilimitations and loopholes ridesharers should be aware of. For example, rideshare companies have limited coverage for when a driver is still technically working but does not have a rideshare customer in the car.

Uber and Lyft trips are divided into three distinct time periods, each with their own rideshare company insurance coverages:

1. Rideshare application is on but the driver is not yet matched with a rider

Uber:

  • Auto liability: up to $75k per person/$150k per accident for bodily injury; $25k per accident for property damage
  • Personal injury: up to $50k per person
  • Underinsured and underinsured motorist coverage: up to $25k per person/$50k per accident for bodily injury; up to $50k per person/$100k per accident for death
  • Contingent collision and comprehensive: N/A

Lyft:

  • Auto liability: up to $50k per person/$100k per accident for bodily injury; $25k per accident for property damage
  • Underinsured and underinsured motorist coverage: N/A
  • Contingent collision and comprehensive: N/A

2. Post match en route to pick up the passenger

Uber:

  • Auto liability: up to $1.25m for all bodily injuries and property damage per accident
  • Personal injury: up to $50k per person
  • Underinsured and underinsured motorist coverage- up to $1.25m per accident
  • Contingent collision and comprehensive: Up to and the lesser of actual cash value or cost of with $1,000 deductible

Lyft:

  • Auto liability: up to $1m per accident
  • Underinsured and underinsured motorist coverage- up to $1m per accident
  • Contingent collision and comprehensive: Up to and the lesser of actual cash value or cost of with $2,500 deductible

3. Driving the passenger to their destination

Uber:

  • Auto liability: up to $1.25m for all bodily injuries and property damage per accident
  • Personal injury: up to $50k per person
  • Underinsured and underinsured motorist coverage- up to $1.25m per accident
  • Contingent collision and comprehensive: Up to and the lesser of actual cash value or cost of with $1,000 deductible

Lyft:

  • Auto liability: up to $1m per accident
  • Underinsured and underinsured motorist coverage- up to $1m per accident
  • Contingent collision and comprehensive: Up to and the lesser of actual cash value or cost of with $2,500 deductible

Does a Personal Auto Insurance Policy Cover Rideshare Drivers?

A regular auto insurance policy may not cover a driver using their vehicles for commercial reasons. Also, there is a high probability that if you are involved in an accident that is investigated, your insurance company will find out. In some cases, personal auto insurance policies have been canceled upon discovering the insured party utilized their car for rideshare service purposes without rideshare insurance.

Rideshare insurance policies offered by auto insurance companies are typically much cheaper, on average 300% cheaper, than commercial auto insurance policies. Rideshare insurance coverage provided by Uber or Lyft may not be enough to cover the entire cost of an accident, leaving the driver responsible for paying the difference out of pocket. Additionally, private auto insurance policies may offer a lower deductible than the above-mentioned Lyft or Uber deductibles. Remember, deductibles must be paid out-of-pocket before any insurance coverage kicks in.

Rideshare insurance policy options include:

Geico: Geico’s rideshare insurance product is much cheaper than their other commercial auto insurance policies. However, their rideshare insurance policy is estimated to be 300% costlier than a regular personal auto insurance policy. Geico’s rideshare insurance is available in: AL, AR, AZ, CO, CT, DE, DC, GA, IA, ID, IL, IN, KS, LA, ME, MD, MI, MN, MS, MO, NE, NM, ND, OH, OK, OR, PA, RI, SC, SD, TN, TX, VA, VT, WA, WI, WV, WY

USAA: USAA’s rideshare insurance can cost as little as $6 more per month and can be added to an existing auto insurance policy. USAA’s rideshare insurance is less expensive than other rideshare endorsements. However, USAA’s rideshare insurance is only offered for rideshare drivers who have served in the military and spouses or children of a current USAA member

Available in: AL, AZ, CA, CO, GA, IA, IL, IN, KS, KY, MA, MD, ND, NE, NV, OH, OK, OR, TN, TX, WA, WY

Farmers: Farmers’ rideshare insurance policy averages about 25% of the cost of a personal policy. Like USAA’s coverage, Farmers’ rideshare product is an add-on extension of an already existing personal auto insurance policy. Farmer’s policy covers driving for personal use and while the rideshare app open, waiting for a passenger. Thes policy provides no coverage when the rideshare company’s coverage is in effect. Farmers’ rideshare insurance is available in: AL, AR, AZ, CA, CO,

FL (under the Foremost brand), GA, ID, IL, IA, KS, MD, MI, MN, MT, NE, NV, NJ, NM, ND, OH, OK, OR, TN, TX, UT, WI

Allstate: Allstate’s rideshare insurance policy, also known as Allstate Ride For Hire, is available for an additional $15 - $30 per year on top of a personal auto policy. Ride For Hire covers drivers while they are looking for a passenger, and can help provide additional coverage for an accident with a passenger in the car. Allstate’s rideshare insurance is available in: AZ, CA, CO, DC, GA, IA, IL, IN, KY, KS, MD, ME, MI, NV, OH, OK, RI, SC, TN, TX, UT, WA, WI

State Farm: State Farm’s rideshare insurance coverage is also is an extended personal auto policy. The policy is not a modified commercial policy. State Farm’s rideshare insurance is available to all rideshare drivers in: AL, AZ, CA, CO, CT, DE, DC, FL, GA, ID, IN, KS, KY, LA, ME, MI, MN, MS, ND, NE, NH, NJ, NM, OH, OK, OR, SC, TN, TX, UT, VA, WA, WI, WV

Mercury Insurance: For about $73 extra per year, drivers can purchase additional rideshare insurance if they already have an existing personal auto insurance policy through Mercury. Mercury insurance is available in: AZ, CA, GA, IL, NV, OK, TX

MetLife: MetLife Auto & Home's Lyft endorsement has coverage for Lyft drivers at any of the three rideshare time periods. Premiums are based on miles driven. Met Life’s rideshare insurance is available in: AL, AK, AZ, AR, CA, CO, CT, DE, DC, FL, GA, HI, ID, IL, IN, IO, KS, KT, LA, ME, MD, MA, MI, MN, MS, MO, NE, NV, NH, NJ, NM, NC, ND, OH, OK, OR, PA, RI, SC, SD, TN, TX, UT, VT, VA, WA, WV, WI, WY

Do I Need Commercial Auto Insurance if I Drive Uber?

In order to drive for UberBLACK, UberSUV, or UberLUX you need to have commercial auto insurance. You’ll also need it if you are a food delivery worker. Commercial auto insurance policies can be pricey, on average between $900-$1200 annually, with an average cost of $750-$1200 per vehicle covered. For a driver with a clean driving record, there is typically up to $1m in liability with a $500 deductible for both comprehensive and collision coverage.

Transportation vehicles used primarily for business purposes need their own commercial auto policy even when the vehicle is not owned by the business. Commercial auto insurance offers coverage on a first and third party basis for personal damage liability, bodily injury liability, medical payments, uninsured motorist coverage, comprehensive coverage underinsured motorist coverage, collision coverage, and roadside assistance.

Commercial auto insurance differs from personal auto insurance policies, in the following ways:

  • Has higher liability limits
  • Has fewer limits on number of vehicles covered
  • Has more add-on coverage options

It is also important to note that UberX and similar service drivers may also need a commercial driver’s license. Be sure to check in with your state’s DMV regarding their driver’s license type requirements for ridesharing. Some states only require a commercial driver’s license if driving as a full-time occupation.

If your state requires a commercial driver’s license while “driving-for-hire” you could be subject to prosecution if involved in an accident without a commercial driver’s license regardless of commercial auto insurance policy coverage.

While most ridesharing companies only require that you have regular car insurance, there are situations in which a rideshare insurance policy is not sufficient. Speak with a trusted agent to help you decide if you need to purchase a rideshare insurance policy or commercial auto insurance by entering your zipcode below.

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