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Rideshare Insurance for Uber and Lyft Drivers

Monday, June 19, 2023

The emergence of ridesharing services like Uber and Lyft in recent years and their growing popularity among consumers has truly revolutionized how we travel. The need for specialized insurance coverage has become essential for the growing number of individuals who work as Uber or Lyft drivers – around 2 million people in the U.S. alone! But what does this type of insurance coverage look like? Are you looking for Uber driver insurance coverage? Let’s dig into the importance of rideshare insurance, its cost, and tips to ensure you have the comprehensive protection you need.

A man drives a car with a female passenger in the back seat.

Understanding Rideshare Insurance

Rideshare insurance is designed specifically for drivers working for services like Uber, Lyft, and other ridesharing platforms as an addition to your personal auto policy. It fills the gaps left by traditional personal auto insurance policies, which typically exclude coverage when the vehicle is used for commercial or business purposes

Most personal auto insurance policies do not provide coverage during the period when the driver is waiting for a ride request or actively transporting a passenger. Without proper coverage, rideshare drivers risk being financially vulnerable in the event of an accident, theft, or other incidents while on the job.

Ridesharing Increases Liability

Ridesharing opens you up to more liability in relation to the use of your car. Not only will you be driving it more frequently than most people as a rideshare driver, but you will be transporting passengers often. Because of this, if you work for a ridesharing company, it is important that you disclose that information to your insurer. If they find out you are engaging in this activity without telling them, they may cancel your coverage or not allow you to renew your policy at the end of the term. 

Rideshare companies recognize the gap between the personal use of their vehicle and using that vehicle to drive for a rideshare company, so they provide some degree of coverage during these periods. However, it is crucial for drivers to secure additional rideshare insurance to ensure comprehensive protection.

How Do Uber Insurance and Lyft Insurance Work?

As mentioned before, Uber and Lyft do carry insurance coverage for their drivers to help close the insurance gap, but it is important to note that the coverage is not all-encompassing. Coverage varies depending on the periods or phases of the rideshare process. Both companies break this down into three main stages.

StageStatusUber and Lyft Coverage
1The driver is not logged into the app.No insurance coverage is provided by the rideshare company. You’ll have personal policy coverage only. 
2The driver is online and waiting for a ride request.In case of a covered accident, the rideshare company maintains some coverage if your personal auto insurance doesn’t apply. 
3The driver is on the way to pick up a passenger or during trips. In case of a covered accident, liability, underinsured motorist, and comprehensive collision insurance apply.

During Stage 1, when the driver is waiting for a ride request, the coverage provided by Uber or Lyft is very limited. For Stages 2 and 3, when the driver has accepted a ride request or is actively transporting passengers, both rideshare companies provide some higher liability coverage. 

However, this coverage may still not be enough to cover all damages and medical expenses in the event of an accident. Remember that this type of insurance is intended to help provide coverage for the driver and passenger. Rideshare insurance helps make sure that you (the driver) have the comprehensive coverage you need.

Take a look at the detailed coverage breakdown each rideshare company offers to consider what level of additional coverage you may need. If you are unsure, we highly recommend you speak with someone from our team or another trusted insurance agent for guidance. 

How Much is Rideshare Insurance?

The cost of rideshare insurance can vary depending on several factors, including the: 

  • Insurance company
  • Driver’s location
  • Driving history
  • Level of coverage desired

However, as a general guideline, rideshare insurance endorsements are fairly affordable. On average, you can expect to spend an additional 10% on top of your regular auto insurance premium, which usually comes out to less than $100 extra per year. 

Choosing Rideshare Insurance Providers

Many auto insurance companies have recognized the growing demand for rideshare insurance and have developed policies tailored to the needs of these drivers. Several reputable companies – including our insurance partners Safeco, Progressive, and Travelers – offer specialized coverage for Uber, Lyft, and other rideshare drivers. By comparing quotes and coverage options, an independent agent can help you select the best rideshare insurance, including the provider and plan that best suits your specific requirements.

A woman sitting in a car's driver seat looks back.

Coverage for Instacart and DoorDash Drivers

Many rideshare drivers also work for platforms such as DoorDash and Instacart, delivering food and goods to homes. If that applies to you, you may find yourself asking, “Does rideshare insurance cover Instacart?” Generally, no.

While policies can vary among insurance providers, rideshare insurance, like policies through Travelers or Allstate, generally does not cover delivery services such as Instacart or DoorDash. These platforms require different types of coverage, as they involve transporting goods instead of passengers.

Car insurance for Uber drivers is crucial for financial protection and peace of mind. And the process for getting that coverage doesn’t have to be difficult! Do you need car insurance? Get a free quote from us at Independent Insurance Associates today.