What is rideshare insurance?
Rideshare insurance is a type of car insurance coverage that fills the gap between the commercial car insurance policy provided by your rideshare employer and your personal car insurance. Individual insurance policies do not cover the transport of paying customers from place to place, and employer-provided policies often only cover the minimum and set restrictions on when you are covered. For example, Lyft insurance and Uber driver insurance only extend additional coverage during specific periods, so if you, your vehicle, or other people are injured outside of those windows, you may incur high out-of-pocket expenses as a result.
Why Uber and Lyft drivers need rideshare insurance
It’s important to know that employer insurance policies do not keep rideshare drivers covered from end to end. Usually, a rideshare employer’s commercial policy only covers you and your vehicle while picking up and dropping off a customer. Ridesharing businesses like Uber and Lyft typically divide coverage periods into the following categories:
Offline - When you’re not logged in to your rideshare driver app, or you’re using your vehicle for personal business, you are not covered by commercial car insurance provided by Uber or Lyft. Instead, offline driving is typically covered by your personal car insurance policy.
Period 1 – Waiting for Request: If you’re logged in for work with your rideshare company, but you have not been assigned a customer yet, you are ineligible for employer-provided coverage. And since you’re technically on the clock during this time, your personal insurance is also likely to be inactive. This leaves a gap in your insurance coverage, leaving you and your vehicle financially vulnerable should an incident occur.
Period 2 – On the Way to Pick Up a Customer: Your commercial insurance kicks in once you accept a customer and start driving to pick them up. However, even though you are covered during this period, rideshare companies tend only to provide limited liability insurance. Both Uber driver insurance and Lyft driver insurance provide bodily injury liability coverage of $50,000 per person, bodily injury liability coverage of $100,000 per incident and $25,000 for property damage coverage.
Period 3 – Ride in Progress: Like period two, you’re also covered by your commercial auto policy after you pick up the customer and for the duration of the ride. Upon dropping off your customer, you return to period one status, where you most likely do not qualify for either your personal insurance coverage or your employer-provided coverage.
Do I need to tell my car insurance company that I am driving for Uber or Lyft?
Suppose you want your car insurance policy to keep you covered from the start of your workday until the end. In that case, you should inform your auto insurance provider that you are a rideshare driver so you can add on extra endorsements or purchase a separate policy as needed.
Do I need extra rideshare insurance if I already have personal and employer-provided policies?
Even with personal policy coverage and employer-provided insurance, you can be left vulnerable during certain parts of your workday as a rideshare driver. Rideshare insurance bridges the gap between those two policies, keeping you safe even when you aren’t transporting a customer.
Do contract delivery drivers need rideshare insurance?
When it comes to car insurance, contract delivery drivers are often similar to rideshare drivers. If you deliver for a service like Uber Eats or GrubHub, or drive for a service such as Uber or Lyft you are only covered by your personal car insurance policy during certain times. For instance, you might be covered while driving to a restaurant to pick up an order or a customer, but not covered while logged into the app and waiting to accept an order. Because of that, purchasing rideshare insurance as a delivery driver could be important to protect yourself financially.
Speak with PJS Insurance Services at (602) 750-0616 to determine whether you need rideshare insurance coverage if you are a delivery driver. Or Request a Free Quote here!
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