It doesn’t matter how good you drive – road accidents can happen to anyone. If you are driving for a rideshare company such as Uber or Lyft, you are protected only to some extent. Although these apps do cover you while you are driving a passenger, this doesn’t extend to the period when you are online but don’t have any orders. This downtime is when rideshare insurance comes into the picture. Read on to find out the benefits of having additional insurance, as well as everything you need to know about Uber insurance costs.
What is Rideshare Insurance?
Rideshare insurance is a form of car coverage designed for those who drive for Uber, Lyft, and other rideshare services. Although these companies have their own insurance, they do have some gaps. Therefore, rideshare insurance functions as an add-on to the insurance you already have.
If you still think you don’t need this coverage, I encourage you to read up on rideshare accident statistics.
Ride Share Insurance Periods
Period 0 – Off (Covered by personal insurance)
Period 1 – Online but have no active ride requests
Period 2 – Online with a ride request
Period 3 – Online with a passenger in your vehicle
What Does Uber Insurance Cover?
Since 1st June 2018, eligible drivers can enjoy free Uber Insurance. The events that are covered with this insurance depend on the period when they have happened.
On-Trip insurance (Period 2 and 3) defines the period from the moment you accept a trip to 15 minutes after the request has been completed. All drivers are eligible for the coverage benefits during this time frame.
Off-Trip insurance (Period 1) refers to the period when you are not providing any services, even if you are online on the Uber App. The insurance covers only active Uber partners. To gain this status, you need to have 150 trips in the past 8 weeks.
On-Trip insurance covers permanent disability, medical expenses, hospitalization, injuries, and death. This means you can expect to get coverage for medical expenses that are not a part of normal healthcare services, allowing you to enjoy private services such as second opinions or additional rehabilitation. Lump-sum payments are also given to those who suffered an injury that makes them unable to work, had to be hospitalized for more than 24 hours, or suffered a permanent disability as the result of an on-trip accident.
If you’re eligible for Off-Trip Insurance, you can expect compensation for severe injuries and sickness, maternity/paternity leave, as well as a one-off payment for jury costs. The Uber insurance doesn’t require any sign-up and is free for all users. If you want to make a claim, you will need to use the online form. Read more about that here. Before making a claim, you should understand the limits of coverage.
Two main coverage Limits:
- Liability: $1,000,000 in damage protection per accident, covers damage you do to your car, pedestrians, or other vehicles while on trip
- Bodily Injury Coverage: $1,000,000 total bodily injury coverage, only if other party is at fault and can’t pay for the costs
The above-listed information is a great starting guide; however, you should check the specific limits in your state.
In any case, we recommend getting additional insurance. It is necessary because Uber doesn’t provide commercial motor insurance. If you are interested to read more detail on what is excluded from the Uber insurance, take a look at their full Partner Protection Policy.
Do I Need Uber Or Other Rideshare Insurance?
You are automatically signed up for Uber insurance as a partner, so you don’t need to do it manually, and there are no fees.
We recommend Rideshare insurance for all drivers who don’t already have commercial insurance that covers all the events excluded from the Uber insurance. This is especially true if you are a driver from one of the states where rideshare insurance during Period 1 is a requirement. California and Colorado, for example, are the first states that passed that legislation. If you are living in one of these states and don’t follow the regulations, you may face penalties.
In any case, we believe you should thoroughly read the insurance policy of your rideshare provider and see whether their coverage is sufficient for you. If you are listed as an active partner, you will have more benefits, and it is possible that you won’t necessarily need additional insurance.
Whatever you choose to do, you must notify your personal insurance provider that you are earning money with your car. Some insurance companies may terminate your coverage when you ask for a claim if you haven’t told them that you’re driving the vehicle for commercial purposes.
What Does Uber Insurance Cost?
The price is usually somewhere between $600 and $1,000 per six months for 100k/300k/100k liability coverage and a $1,000 comprehensive/collision deductible. These rates all depend on which company you go with and your driving histroy.
Ride-sharing companies don’t offer collision coverage for Period 1. That means that if you get in an accident when you are online but don’t have any ride requests, you will be responsible for paying the repairs. Your personal insurance will not cover this damage because you were using your vehicle for commercial reasons.
If you need only simple insurance, you may also be satisfied with their smaller options, which start at $15 per month. Most of these companies cover you only during Period 1, while the other periods (when you are driving the customers) are expected to be covered by Uber or Lyft.
Where Can You Get Rideshare Insurance?
Some of the most popular rideshare insurance companies are Allstate, Eerie, Farmers, Geico, State Farm, and Mercury. Other than Allstate, insurance companies work only in some states.
Therefore, the first thing you will need to check is the availability of the insurance companies in your state. Once you find a suitable solution, you should first inform your auto insurer that you are working for a ride-sharing company. You also want to have a good look at their plan and compare it with your rideshare company’s policy to find potential gaps. If there are any, talk with your insurer and see if you can get a deal where everything is covered. As we stated above, this gap will most likely be a collision during Period 1.
If a rideshare policy isn’t available in your state, you will need to consider commercial insurance. This option is more expensive but also has higher liability limits. The lowest cost is usually between $1,000 and $2,500 per year.
What are the best rideshare insurance providers in the US?
The number of rideshare insurance companies is growing every year, and they all have their benefits. However, few companies stand out from the rest.
State Farm is one of the rare companies that offer insurance over all three periods. However, that doesn’t extend to your liability coverage, which can make Uber insurance cost more than expected.
We like Allstate because it is currently covering 42 states and is one of the oldest rideshare insurance companies. It covers Period 1 and has one of the highest deductible gap coverages for other periods. It is also one of the least expensive options.
Available in 30 states, Farmers is a reputable insurer that covers Period 1. It also has a renter’s discount and is an affordable option.
Geico offers a “hybrid” policy, which means that it replaces your personal auto insurance while also covering you when you are not on-trip. It is available in 41 states and covers both you and your passengers.
Be Smart - Drive Insured
Some people try to drive for a rideshare company without the proper insurance. While this might be possible, you are only asking for trouble if an accident occurs.
Your personal policy will not cover the rideshare accident, so your passengers won’t get the coverage they need. For this reason, they could file a lawsuit against you for their medical costs. Also, who knows what other legal problems you will face for conducting business without the proper coverages.
Before you go, compare Uber insurance costs for the companies listed above. Then choose the policy you feel covers you best so you can drive with fewer worries!
I have been a freelance digital marketer since 2014, specializing in content marketing and editing. My interest in finance and frugal living began while living overseas, inspiring me to start this blog. When I am not helping clients generate more leads or market their services, I explore the world, listen to podcasts, and dream big.