Rideshare Insurance: Costs and Requirements Explained

A rideshare insurance policy can help plug coverage gaps left by your personal auto insurance and the coverage provided by the rideshare company. Transportation network companies — like Uber or Lyft — usually provide limited liability protection for their drivers, and rideshare insurance can help fill those gaps.

Rideshare insurance is a type of car insurance for Uber drivers and other gig drivers that helps cover gaps between personal auto policies and a rideshare company’s limited coverage.

Keep reading to learn about rideshare car insurance, how it works with coverage offered by a rideshare platform and how to get it.

On This Page

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  What Is Rideshare Insurance?

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  Do You Need Rideshare Insurance?

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  How Rideshare Insurance Works

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  What Uber and Lyft Insurance Covers

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  What Is the Rideshare Insurance Coverage Gap?

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  How Much Does Rideshare Insurance Cost?

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  Rideshare Insurance for Delivery Drivers

• 

  Where To Buy Rideshare Insurance

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  What Happens if You Have an Accident While Ridesharing?

• 

  Should You Tell Your Insurance Company About Rideshare Driving?

• 

  Rideshare Insurance at a Glance

• 

  How To Compare Rideshare Insurance Quotes

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  FAQs

What Is Rideshare Insurance?

Rideshare insurance is a type of standalone commercial car insurance policy or personal car insurance endorsement that provides coverage if you work for a delivery service company or transportation network company (TNC), such as Uber or Lyft. Since personal auto insurance policies usually exclude coverage for commercial activity, you will not be covered when driving your car to make money transporting people or items.^[1]

Although many state laws require rideshare companies to provide a minimum level of coverage for their drivers when they’re on the clock, rideshare insurance can offer more extensive protection with greater coverage.^[2] This insurance option can help cover the gap between dropping off your last customer and accepting the next ride request.

Do You Need Rideshare Insurance?

While not always required by law, rideshare insurance can help you fill in potential gaps in the coverage provided by your rideshare company. In many cases, the insurance coverage provided by your rideshare service platform may be enough to cover your state’s minimum requirements. However, there may be gaps in coverage during certain periods, such as when you are waiting for your next passenger or delivery, which could leave you with more limited protection.

In states where your rideshare company doesn’t provide enough required coverage, you may need to purchase rideshare insurance to drive legally.^[3]

Uber and Lyft Drivers

Both Uber and Lyft may have gaps in coverage, such as right after dropping off a passenger, where their included insurance may not cover you. Rideshare insurance can help fill this gap. Additionally, Lyft may not meet minimum liability requirements in every state, which means you may need to purchase rideshare or commercial coverage when working with the company.^[3]

DoorDash and Delivery App Drivers

Delivery services like DoorDash may provide limited coverage while transporting goods, but that coverage reverts to your personal auto insurance when not actively making deliveries.^[4] Depending on your personal car insurance, this could leave you in a coverage gap. Additionally, some delivery services, like Instacart, may not offer coverage and will require you to obtain it elsewhere.^[5]

How Rideshare Insurance Works

Rideshare insurance works like regular insurance, except it covers you and your vehicle while working as a driver for companies like Uber or Lyft. It comes into play any time you are logged in to your rideshare app and is designed to fill gaps in the insurance provided by your rideshare company.

Below is a breakdown of how your coverage switches while using platforms like Lyft and Uber:^[6]

When Your App Is Off

When your rideshare app is off, your insurance will default to your personal auto insurance, since rideshare coverage only takes effect when you’re on the clock. Ensure you meet your state’s personal auto insurance requirements, or you may face legal consequences or fines if you get pulled over or get in an accident.

When You Are Waiting for a Ride Request

Your rideshare insurance becomes active once you turn on your rideshare app and wait for a customer. At this point, your personal insurance will consider you to be entering a period of business use and will stop coverage, leaving you with a potential coverage gap.

Typically, a rideshare company’s coverage offers limited liability protection at this time, with rideshare insurance covering the gap. Rideshare insurance lets you increase those limits to match the usually higher limits provided in your personal auto insurance policy.^[2]

When You Have a Passenger or Are En Route

After you accept a trip, the rideshare company’s coverage takes over and will cover you. However, your rideshare insurance can still play a role during this stage by covering your rideshare company’s high deductible. For example, Uber has a $2,500 deductible for physical damage claims, and if you have rideshare insurance, your insurer may help cover that out-of-pocket expense.^[2]

After you’ve picked up your passenger, the rideshare company will cover you identically to how it does when you accept a trip and when you are driving a passenger. However, coverage will also extend to the passenger and their personal property in the vehicle.^[2]

What Uber and Lyft Insurance Covers

Below, we’ll break down the insurance options that could be covered with rideshare insurance, as the specific coverage options can vary between policies:

Uber Insurance Coverage

When your Uber app is online, and you’re available for a trip, you’ll be covered for a limited amount of third-party liability coverage:^[7]

• $50,000 per person and $100,000 per accident for injuries
• $25,000 in property damage per accident

After you’ve picked up your passenger, or are en route to do so, your coverage will increase:^[7]

• Up to $1,000,000 for third-party liability coverage
• Physical damage coverage up to your vehicle’s actual cash value (ACV) with a $2,500 deductible. However, this coverage requires comprehensive and collision coverage on your personal car insurance policy.

Additionally, depending on your state, Uber may also offer additional coverage to meet state requirements, including:^[7]

• Uninsured/Underinsured coverage (UM/UIM)
• Personal injury protection (PIP)
• Medical payments (Medpay)

Lyft Insurance Coverage

When your Lyft app is online, and you’re available for a trip, you’ll be covered for a limited amount of third-party liability coverage. Keep in mind that some states, such as Arizona or Nebraska, may feature lower coverage limits:^[3]

• $50,000 per person and $100,000 per accident for injuries
• $25,000 in property damage per accident

After you’ve picked up your passenger, or are en route to do so, your coverage will increase:^[3]

• Up to $1,000,000 for third-party liability coverage
• Physical damage coverage up to your vehicle’s actual cash value (ACV) with a $2,500 deductible. However, this coverage requires comprehensive and collision coverage on your personal car insurance policy.

Additionally, depending on your state, Lyft may also offer additional coverage to meet state requirements, including:^[3]

• UM/UIM
• PIP
• Medpay

Platform Insurance Limits and Exclusions

A rideshare endorsement will not cover you while you are picking up a passenger and driving them to their destination. Instead, your rideshare company will provide primary coverage for liability and physical damage (if applicable).

Additionally, some rideshare insurance policies, such as those offered by Clearcover, won’t cover delivery services like Uber Eats or DoorDash.^[8] If you’re looking to expand your gig-working options using your car, ensure you review the limitations of your policy or endorsement.

What Is the Rideshare Insurance Coverage Gap?

The rideshare insurance coverage gap is the period between turning on the app and accepting your next delivery or passenger request, during which you typically have no personal auto coverage and may have only limited coverage from your rideshare company. Without additional coverage, such as a rideshare insurance endorsement or a standalone commercial policy, you could be left without necessary coverage to protect you in the event of an accident.

How Much Does Rideshare Insurance Cost?

The exact cost of rideshare insurance can vary based on how you choose to get it, as you could purchase it as part of an endorsement to your personal auto coverage or as a standalone commercial auto policy. Deciding which version of rideshare coverage to get, alongside other factors, can affect your monthly rate.

Rideshare Endorsement

You could choose to purchase a rideshare endorsement to your existing auto insurance policy. These costs can vary between insurance companies. For example, a rideshare endorsement from Mercury Insurance can start at around $28 per month, while one from State Farm can increase your premium by 15% to 20%.^[9][10]

Commercial Auto Policy

Purchasing a commercial auto policy can protect you during your rideshare insurance coverage gap. While rideshare insurance endorsements tend to be cheaper than a commercial auto policy, the personal insurance add-on may not be available from every insurer, making a commercial auto policy an alternative option.^[11]

Factors That Affect Your Rate

Factors that can affect your rates for a rideshare endorsement or commercial auto policy could include:

• Coverage limits
• Location
• Deductible
• Driving history
• Age
• Mileage while driving for a rideshare company

Rideshare Insurance for Delivery Drivers

Rideshare insurance may also cover delivery drivers, such as those delivering for DoorDash, Uber Eats or Grubhub. However, coverage for delivery drivers may not be included in every rideshare insurance policy, with some insurers offering it as an additional endorsement to your rideshare coverage.^[12]

Where To Buy Rideshare Insurance

Rideshare insurance is offered by multiple major insurance carriers, though coverage may not be available in every state. Some of these carriers include:

• State Farm^[10]
• Allstate^[2]
• American Family^[13]
• Mercury Insurance^[9]
• Travelers^[14]
• Farmers^[15]
• USAA^[16]

What Happens if You Have an Accident While Ridesharing?

If you get into an accident while ridesharing, the process is mostly the same as getting into a standard accident, although you may need to involve the rideshare company in the process.

Ensure Safety and Report the Accident

After an accident while driving for a ridesharing service, you’ll want to follow the standard procedure you would after any accident — check with passengers and any other drivers that may be involved to ensure they’re safe while checking for injuries, move the vehicle out of the flow of traffic and take pictures of the incident. You should also contact emergency services to get a report of the incident, which may be necessary when submitting an insurance claim.

Notify the Rideshare Platform

You’ll want to contact your rideshare platform to request what information they’ll need regarding the accident. You can typically contact them through their service app or by phone at the number listed on their website.

File a Claim With Your Insurance Provider

You’ll want to file a claim with your insurance provider as soon as possible, with the information gathered from the accident. Depending on what stage of ridesharing you were in, you may need to instead file a claim with the rideshare platform, the provider that the platform operates through or both your rideshare insurance provider and the platform.

Should You Tell Your Insurance Company About Rideshare Driving?

You will need to inform your insurance company when you’ve taken up rideshare driving, as this could result in coverage exclusion while driving your vehicle for business purposes. Refusing to tell your insurer about rideshare driving could result in claim denials or policy cancellation.^[17] While adding necessary rideshare endorsements or purchasing a commercial auto policy may increase monthly premiums, the added costs outweigh the potential consequences of driving without coverage.

Rideshare Insurance at a Glance

Below is a brief overview of essential information about rideshare insurance:

• Rideshare insurance helps cover gaps when your personal auto policy transitions to coverage offered by your rideshare service, typically while you're on the clock and waiting to accept your next passenger request.
• Rideshare coverage is available as a standalone endorsement to your personal auto policy or as a standalone commercial auto policy.
• If you get into an accident without rideshare insurance, you could leave yourself vulnerable to covering accidents out of pocket if they happen during a coverage gap.
• A rideshare endorsement may be less expensive compared to a commercial policy, but it may not be available from every major insurance provider in your area.
• While rideshare platforms offer some form of minimum insurance coverage, they may not have high enough coverage limits for where you live and could necessitate that you purchase rideshare insurance to meet state requirements.

How To Compare Rideshare Insurance Quotes

Consider these tips when comparing quotes for rideshare insurance:

• Determine how much you drive: If you drive only part-time with your personal vehicle, you may need only a rideshare endorsement. However, if you drive your vehicle for rideshare services full-time, you may need a commercial auto policy instead.
• Compare coverage limits: Don’t only look at premium comparisons — review coverage limits and ensure you’re getting enough protection.
• Check deductibles: Opting for a higher deductible can help lower your rideshare insurance premiums, but could leave you paying more out of pocket if you need to make a claim.
• Review exclusions: You should understand what your policy doesn’t cover, including any potential coverage gaps.
• Get multiple quotes: Try to get quotes from three to five different insurance companies to understand your options. Consider SmartFinancial’s auto insurance comparison tool to help you quickly compare different rates and coverages. Click here for free commercial auto quotes today!