What is rideshare insurance?

With living expenses up, more people are turning to side hustles to make ends meet more than ever. One of the most popular ways to earn extra money is to drive for a rideshare company like Lyft or Uber.

When you drive for a rideshare company, they usually provide free insurance to cover you while you work. However, this insurance usually has serious gaps that can leave you holding the bill after an accident.

To avoid this problem, you can buy rideshare insurance as an add-on to your personal policy. All companies are different, but most extend your personal coverage to your working hours. That means if you have liability, comprehensive, and collision insurance, they’ll stay active while you work.

The good news is that rideshare insurance can be found with a bit of searching and is usually cheap. Read on to learn more about rideshare insurance and where to find it. Then, compare quotes with companies that offer rideshare coverage to find the most affordable policy.

What is rideshare insurance?

When you buy insurance for your car, it’s considered a personal policy — the company only agrees to cover you when you use your vehicle for personal reasons. It does not cover you when you use your car for business purposes.

In fact, if you try to file a claim with your personal insurance when you were actually working, your claim will likely be denied. You might also be dropped as a customer.

This is where rideshare insurance comes in. The best car insurance for Lyft and Uber drivers covers you no matter what you use your car for — work or personal reasons.

Insurance companies require extra coverage when you use your car for work because of the higher risk. Professional driving is one of the most dangerous jobs in America because of the increased time on the road, which is why your personal policy won’t cover your work hours.

When you drive for companies like Lyft or Uber, you’ll get a bit of insurance for free. However, this provided coverage only covers you when you have a passenger and might not cover your car at all. Rideshare insurance is valuable because it makes sure you’re always covered.

Unfortunately, rideshare insurance is not available in every state. A commercial auto insurance policy is the next best thing if you can’t buy rideshare coverage.

What does rideshare insurance cover?

Although every company is different, rideshare insurance typically extends a driver’s personal policy to their working hours.

That means if you have collision and comprehensive insurance on your personal policy, it will extend to your working hours. Since collision insurance pays for repairs after a car accident, and comprehensive handles almost everything else, having it for your work could save you thousands.

The insurance provided by Uber and Lyft is little more than liability auto insurance, which protects the companies from being sued by your passengers if something happens. If you add rideshare insurance to your policy, your car will have much better protection.

Is rideshare insurance required?

Since rideshare companies usually provide liability and occasionally uninsured motorist coverage to their drivers, you won’t legally be required to buy additional coverage.

However, getting it is still worth the price, especially since finding affordable rideshare insurance isn’t difficult.

You’ll still need to meet your local insurance laws for your personal policy, even if you don’t buy rideshare coverage.

What’s the difference between rideshare coverage and commercial auto insurance?

Rideshare insurance isn’t usually a separate, standalone policy. Instead, it’s either an add-on or an endorsement for your personal policy.

Commercial auto insurance is a separate policy that usually covers vehicles exclusively used for business purposes. Since most rideshare drivers use their personal car for working, you’d need to buy two policies if you were interested in commercial auto.

Commercial auto insurance offers valuable protection for working vehicles, but it’s more expensive than a simple rideshare add-on. If you have a choice, choosing rideshare coverage is your best bet.

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Which companies have the best car insurance for rideshare drivers?

Although rideshare services are popular, not every insurance company offers coverage. If you’re interested in rideshare insurance, consider the following companies:

• Geico. Geico auto insurance for rideshare drivers is an excellent choice because the deductible can be as low as $250. Rather than offer an add-on, Geico has a hybrid policy that combines rideshare insurance with personal coverage.
• Progressive. While it’s only available in 34 states, Progressive auto insurance pays the difference between your deductible from your rideshare company, so you’re not stuck with it. The only downside is that Progressive rideshare insurance costs a little more than others.
• Travelers. Travelers auto insurance ranks as some of the best car insurance for Lyft drivers because it’s one of the most affordable options. However, it’s only available in Colorado and Illinois.
• Esurance. Like Progressive, Esurance covers your rideshare company deductible, so you have nothing to worry about.
• Mercury. Mercury car insurance costs about $1 a day for rideshare insurance, but it’s only available in 11 states.
• Allstate. While offering solid rideshare insurance, Allstate auto insurance has some of the best car insurance for Uber drivers because they’ve partnered together to make a special policy.
• State Farm. For a 15% increase on your insurance bill, State Farm auto insurance makes it easy to drive for multiple companies at once.

While these are some of the best insurance companies for rideshare drivers, they’re not your only options. Comparing quotes with as many companies as possible is the best way to find affordable coverage.

How much does rideshare insurance cost?

There is a lot of variety in how companies offer coverage for rideshare drivers. Some offer a tidy bundle for a set amount, which can easily be added to a policy. Others create hybrid policies that include everything you need to drive.

Due to this difference, comparing rates is difficult. For example, buying a hybrid policy will likely cost between 15% and 20% more than what you would pay for a standard plan. To get an idea of what you might pay for rideshare insurance, check below:

• Allstate — $20 a year
• State Farm — A 15% to 20% increase on your rates
• Safeco — $10 a month
• Erie — $9 to $15 a month
• Mercury — Starts at $27 a month

Another factor that affects the price of your rideshare insurance is how much coverage you have in your personal policy. A minimum insurance policy will cost much less than a full coverage policy because it has more coverage.

How do you get rideshare insurance?

If you want to buy rideshare insurance, you’ll need to do it with your current company. If that’s not an option, you can always compare prices and get an entirely new policy.

To get a rideshare policy, make sure to let your company know what your plans are. You’ll need to inform them always since you won’t be able to make a claim during work hours with your personal insurance, and a representative can help you pick the right coverage.

If rideshare is available at your company, the representative will help you sign up for a plan. If your current company doesn’t offer rideshare coverage, you’ll know it’s time to find new insurance.

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How does insurance from Uber or Lyft work?

There are four phases during your work hours as a rideshare driver, and understanding these is crucial to ensuring you have the right insurance.

• Phase 0. Off duty — App is off. Your personal policy covers you.
• Phase 1. Available — App is on, but you’re waiting for a customer. Your personal policy and company liability does not cover you.
• Phase 2. En route — You’ve accepted a customer and are on your way. Your company insurance covers you.
• Phase 3. On Trip — The customer is in your car. The company insurance is in full effect.

As you can see, there is a gap in phase 1 when you’re waiting for your next customer. This crucial gap is protected through rideshare car insurance.

When you’re ready to buy, car insurance companies that cover ridesharing protect more than just the gap in phase 1. They also protect you when your company-provided liability runs out. Most importantly, it protects you if you need medical attention.

Find the Best Car Insurance for Rideshare Drivers Today

No matter which company you drive for, rideshare insurance offers valuable protection for your car so you can keep running customers without having to worry. Rideshare insurance is usually cheap, but it’s not available in every state.

Now that you better understand rideshare insurance, your next step is to compare quotes. Unless you already have a policy and want to add rideshare insurance, looking at multiple companies is the best way to find affordable coverage.

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