Why You Need Uber and Lyft Ride Share Insurance & What It Covers

Do you drive an Uber? If so, you know that your vehicle is prone to accidents. It could be an at-fault accident, where you are mandated to pay for the repair of the other driver’s vehicle and medical bills if anyone is injured.

It is high time you purchased Uber and Lyft ride share insurance to protect your vehicle. In this article, we talked extensively about:

  • What Rideshare Insurance is
  • How Uber and Lyft Drivers can benefit from it
  • Where to Purchase Uber and Lyft ride share insurance

What is Rideshare Insurance?

This is a type of automobile insurance policy exclusive to drivers working with ridesharing companies, such as Uber and Lyft.

These drivers are prone to getting into accidents or bumping into someone. When this happens, the ridesharing company may not pick up the tab. Therefore, these drivers are left to cater for the financial expenses resulting from the accident or vehicle damage.

Getting insurance with rideshare helps you to cover protecting yourself, your vehicle, and others who may be affected when an accident happens.

Is Ride Share Insurance Worth It?

The policy is ideal for drivers working with gig-driving companies like Uber and Lyft. You need it to bolster the coverage offered by your vehicle insurance.

Have in mind that your vehicle insurance is only used to make claims resulting from accidents involving you or your family members covered.

Accidents and road-related mishaps resulting from earning income in the form of ridesharing may not be covered.

Likewise, most ridesharing companies provide car insurance with rideshare coverage. That way, the drivers would be covered. These companies are mostly required by the state to offer this type of coverage to registered drivers.

What You Need to Know About Uber and Lyft Rideshare Insurance Coverage

Things can be tricky for drivers working with Uber and Lyft as it pertains to ride share insurance coverage.

Typically, you may not need to purchase the coverage because it is state-required. Your ridesharing company (Uber or Lyft) will purchase it for you, as well as other drivers.

However, there is a gap in how much this coverage can go. This is where you want to pay particular attention so you don’t go overboard.

First, the extent of your Uber and Lyft rideshare insurance is for Enroute and Transportation. What this means is that the taxi rideshare insurance covers you while going to pick up a passenger and when you are transporting the passenger to the destination.

Second, things can be a bit confusing on whether you are covered while waiting for a passenger. In this case, you are waiting for your ride to be booked. Technically, both the insurance coverage with rideshare and personal auto insurance may not be active.

What this means is that both you and your vehicle may be vulnerable to accidents and other road mishaps. If any of those happens, you may have to pay out of your pocket to fix the damages.

How Does Contingency Policy Work for Uber Rideshare Insurance?

In furtherance of the last section, you may be required to pay the cost of repairing the vehicles involved in an accident. This is because your Uber and Lyft ride share insurance may not cover those expenses.

This is known as Period 1 and is known as “the gap.” Since you are not yet matched to a rider, your Uber rideshare insurance may not be active. So does your Lyft rideshare insurance.

However, Uber and Lyft may be able to cover some expenses that arise from such accidents. This is known as “Contingent Policy.”

The policy states that the ridesharing company will pay for third-party damages. This includes damages to other people’s vehicles and bodily injury if anyone was hurt.

Any damage to your vehicle or your body wouldn’t be covered. Rather, you will have to pay out of your pocket to cover such expenses.

Is Rideshare Insurance Necessary: Why You Must Get It

You need to purchase Uber and Lyft ride share insurance for the following reasons:

1.    Limited Coverage Options

Typically, your vehicle insurance only covers accidents and bodily injuries caused by the use of your vehicle. It is only available for the private use of the vehicle. If you are using the vehicle for commercial purposes, commercial auto insurance is required.

Even at that, commercial auto insurance doesn’t cover ridesharing. So, your vehicle may not be insured if it gets into an accident while driving for a ridesharing company.

2.    Risk of Paying Higher Rates

You stand a risk of paying higher rates on auto insurance if you don’t have Uber and Lyft ride share insurance. It is possible if your vehicle insurance company finds out that you are using your vehicle to make money instead of for personal use.

What is Covered with Uber and Lyft Ride Share Insurance?

Here are some of the components of the auto insurance with rideshare:

1.    Collision Coverage

It covers your vehicle if it collides with another vehicle. Typically, the rideshare insurance companies pay for the repair of damages caused in the process of the collision.

However, this is exclusive to drivers that have the coverage. For example, if your vehicle insurance doesn’t have collision insurance, your ridesharing auto insurance wouldn’t have it either.

2.    Third-Party Liability Coverage

It covers liabilities for third parties. Third-parties here refer to any other person other than the rideshare driver. It could be a pedestrian or another driver who collided with your vehicle.

Third-party liability coverage also covers the medical bills for persons injured when your ridesharing vehicle collided with another vehicle on the road.

3.    Uninsured & Underinsured Motorist Coverage

This type of coverage is the best insurance for rideshare drivers who collide with another driver that doesn’t have sufficient coverage.

In this case, the coverage extends to both the underinsured driver and the passengers in the accidented vehicle.

Uber and Lyft Rideshare Insurance Deductible

Drivers with ridesharing companies like Uber and Lyft may have to pay a higher deductible. The deductible is the “out-of-the-pocket” expenses or payments made by the drivers towards a claim.

Depending on the circumstances of the claim, the drivers may pay a higher deductible. For example, you may pay between $1,000 and $2,500 as deductible for comprehensive and collision deductibles.

Where to Purchase Uber and Lyft Rideshare Insurance Policy

Below is a list of the best ridesharing insurance companies for Uber and Lyft drivers:

  • Allstate
  • USAA
  • Progressive
  • Farmers
  • Mercury
  • State Farm
  • Travelers
  • American Family

Verdict: Ridesharing Insurance is Necessary for Uber and Lyft Drivers

Purchasing Uber and Lyft ride share insurance help protect your vehicle from third-party liabilities and collision costs. While you may not get cheap rideshare insurance, you can be confident that the coverage will offer value for the premiums paid. Besides, your ridesharing company can help cover you to a considerable extent.


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