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Rideshare Insurance: Coverage, Costs, & Best Options for Drivers

If you’re a rideshare driver, or thinking of becoming one, you might not be aware that the insurance coverage provided by the rideshare company—Lyft, Uber, or even delivery-based companies like Instacart—is not comprehensive. Although these companies do provide some coverage, you’ll want to consider investing in rideshare insurance to cover the gaps between the company’s coverage and your personal auto insurance.

In this guide, therefore, we’ll break down everything you need to know about this type of small business insurance, including how it works, how much it costs, and the best rideshare insurance providers on the market.

What Is Rideshare Insurance?

Rideshare insurance is a specialized type of insurance designed to provide liability and damage coverage for rideshare drivers—including those that drive for Lyft, Uber, and other ride-hailing companies. Rideshare insurance also is available for delivery drivers, like those who drive for Instacart, Grubhub, or Seamless.

It’s important to understand, however, that rideshare insurance is different from traditional commercial auto insurance. Overall, rideshare insurance accommodates the coverage gap between your personal auto policy and the insurance policy provided by the rideshare or delivery company.

In this way, because rideshare insurance is designed to cover specific timeframes (as we’ll discuss in detail below), it’s typically more affordable, with lower liability limits than traditional commercial auto insurance. This being said, though, unlike commercial or personal auto insurance, rideshare insurance isn’t available everywhere.

Why Do I Need Rideshare Insurance?

When it comes down to it, there are three different insurance policies that work together when you drive for Uber, Lyft, or another ride-hailing company—your personal auto policy, your rideshare insurance, and the insurance that the rideshare company provides.

In essence, rideshare insurance is necessary because your personal auto insurance policy and the insurance provided by the rideshare company do not cover you for the entire time you’re on the job. It’s unlikely that your personal auto insurance policy will cover accidents that occur when you’re driving for rideshare and the policy you receive from Uber and Lyft is limited in its coverage.

Let’s explain.

Each of these policies kicks in during a different time period:

  • Period 0: You’re driving, and your app is off. Your personal auto insurance covers you during this time.
  • Period 1: Your app is on, and you’re waiting for a ride request. The rideshare company’s insurance will only provide liability coverage. For damage coverage, you need rideshare insurance.
  • Period 2: You’ve accepted a ride request and are in transit to pick up the customer. The rideshare company’s insurance will provide coverage.
  • Period 3: You’re transporting the customer. The rideshare company’s insurance will provide coverage.

As you can see here, your insurance coverage is limited in Period 1. Although Uber, Lyft, and other major ridesharing companies provide insurance for their drivers, this coverage is only comprehensive during Periods 2 and 3—in other words, when you’re in transit to pick up customers or have customers in your car.

During Period 1, Uber and Lyft only provide limited liability coverage: $50,000 bodily injury per person, $100,000 bodily injury per accident, and $25,000 property damage per accident (as you can see in the breakdown below). Therefore, if you hit someone with your car and they sue you, Uber and Lyft will pay only up to these limits to cover property damage and bodily injuries to the other person and their vehicle.

Uber and Lyft won’t provide collision coverage, comprehensive coverage, or uninsured/underinsured coverage during Period 1.

Uber and Lyft Insurance Coverage Breakdown[1][2]

Rideshare PeriodInsurance Coverage
1: App on, waiting for ride
– $50,000 bodily injury per person
– $100,000 bodily injury per accident
– $25,000 property damage per accident
2: Accepted ride request, in transit to customer; 3: Transporting customer
– $1 million liability coverage per accident
– Uninsured/underinsured motorist coverage varies by state
– Comprehensive and collision coverage up to the value of your car if you have these options on your personal auto policy (subject to a deductible)

What Does Rideshare Insurance Cover?

So, as we’ve explained, rideshare insurance is intended to provide gap coverage—especially during Period 1, when you’re not covered by your personal auto policy, and your coverage from the rideshare company is limited.

This being said, the specifics that are covered by rideshare insurance will vary based on your state, provider, and the type of policy you choose. Generally, however, rideshare insurance can cover:

  • Damage to your car from a collision
  • Loss or damages to your car if it’s stolen, vandalized, or damaged in a fire or natural disaster
  • Injury caused by a driver who is uninsured or underinsured

These types of coverage, referred to as collision coverage, comprehensive coverage, and uninsured/underinsured motorist coverage, respectively, protect you during Period 1, where you’re not protected by your other policies.

In addition, however, some rideshare insurance policies offer more coverage options, and sometimes even add-on or replace your personal auto policy. This extra coverage might include:

  • Medical payments for you and your passengers
  • Property damage and bodily injury to others
  • Legal defense if someone sues you over an accident
  • Rental car reimbursement
  • Roadside assistance and towing expenses

How Much Is Rideshare Insurance?

When it comes down to it, the cost of rideshare insurance will largely depend on the provider, the specific policy, and the state where you’re driving. This being said, however, the average cost of rideshare insurance ranges from about $15 to $120 per year.

In fact, according to John Frigo, digital marketing lead at MySupplementStore and former rideshare driver, who got his rideshare insurance through State Farm, it only cost him about $15 to $17 extra per month, on top of his personal auto insurance premium, to add rideshare coverage.

In this way, compared to other types of insurance, rideshare insurance is fairly affordable. Plus, as we mentioned above, many personal auto providers allow you to add rideshare to your existing policy—for only a small amount on top of your existing annual premium.

It’s important to note, though, that like any auto insurance policy, you’ll likely have a deductible on your rideshare insurance policy as well. A deductible is a specific amount of money that you have to pay before the insurance company will pay out benefits.

Generally, deductibles are most common on collision and comprehensive coverage and can range from as little as $250 to as high as $1,000 or $2,000. Uber and Lyft both include this coverage during Period 3 (as shown in the table above)—but Uber requires a $1,000 deductible and Lyft requires a $2,500 deductible.

Overall, the lower your deductible, the higher your annual premium will be. If you’re looking to save on your insurance, therefore, you might opt for a high deductible—but this also means you’ll have to pay more out of pocket before your insurance company covers your costs.

Who Offers Rideshare Insurance?

As we’ll discuss in more detail below, some of the biggest names in auto insurance offer rideshare insurance—including Geico, State Farm, Progressive, and more.

This being said, however, most insurance companies limit coverage to certain states, so you’ll want to be sure that any provider you’re considering offers rideshare coverage in the state where you drive.

Additionally, it’s important to note that rideshare insurance requirements can vary by state and city—New York City, as an example, requires that you purchase commercial auto insurance (which is different than simple rideshare insurance) and apply for a commercial driver’s license[3].

Moreover, you’ll also find that most insurance companies do not offer rideshare insurance on its own. Instead, as we’ve mentioned, it’s usually offered as an add-on to an existing personal auto policy, or as a hybrid policy.

A hybrid policy, like the one that Geico offers, is a single auto insurance policy that combines traditional personal auto insurance and rideshare insurance together. With this type of policy, you’re covered both when you’re on and off the job.

Along these lines, however, due to the way rideshare insurance policies work, you’ll typically have to work with a single provider for your personal auto and rideshare insurance policies. You cannot, for example, have a personal auto insurance policy from Geico and then a rideshare insurance policy from State Farm.

Best Rideshare Insurance Providers

Wondering where to start your search for rideshare insurance?

As we mentioned, many major insurance companies offer rideshare insurance. Therefore, you might start by reaching out to your current personal auto insurer to see if they can work with you for rideshare insurance as well.

On the other hand, if you’re looking to change your provider or your current provider doesn’t offer this type of insurance, you might consider the five top companies below:

Top Rideshare Insurance Providers, Summarized

Insurance CompanyType of PolicyNumber of States With CoverageEstimated CostBest for:
Add-on to personal auto policy
43
Adds 15% to 20% to current premium
Comprehensive add-on policy; customer service
Hybrid personal auto and rideshare policy
40
$269 per month based on sample quote (covers personal and rideshare driving)
All-in-one rideshare and personal auto insurance policy
Add-on to personal auto policy
7
As little as $0.90 per day (plus cost of personal auto policy)
Affordable, simple rideshare coverage
Add-on to personal auto policy
47
Adds $15 to $20 per year to current premium
Rideshare coverage across the U.S.
Add-on to personal auto policy
36
Varies based on your policy
Coverage for rideshare and delivery drivers; drivers who need commercial auto policies in their state

1. State Farm

With 43 out of 50 states covered, State Farm is a great option for rideshare insurance for drivers all over the U.S. State Farm offers rideshare insurance as an add-on to their personal auto policies, providing coverage that includes:

  • Medical, emergency roadside assistance, and rental car reimbursement
  • Personal deductible applies to rideshare as well; if your personal policy is lower than the deductible on your insurance from the rideshare company, you pay the lower amount
  • Claims are filed and managed through State Farm

In addition, State Farm is affordable—you’ll only pay 15% to 20% more on your current annual premium. As an example, if you pay $300 every 6 months for your personal auto insurance, State Farm’s rideshare coverage would add about $45 to $60 to your costs.

This being said, however, unlike some other insurers, you’ll have to work directly with a local State Farm agent to receive a quote and discuss your coverage options.

2. Geico

Of all the options on our list of the best rideshare insurance providers, Geico is the only one who offers an all-in-one personal auto and rideshare insurance policy. Instead of an add-on to your personal policy, Geico’s hybrid policy ensures that you receive the same coverage regardless of whether or not you’re driving rideshare at the moment or not.

Overall, Geico’s coverage can include:

  • Collision damage
  • Medical expenses for you and your passengers
  • Property damage and bodily injury to others
  • Legal defense in case of a lawsuit
  • Physical damage
  • Uninsured or underinsured motorist coverage
  • Reimbursement for towing and roadside assistance expenses
  • Rental reimbursement

Additionally, Geico’s coverage can protect delivery drivers as well. You can put in your information online to receive a free quote for Geico’s hybrid rideshare insurance.

3. Mercury

Like many other providers, Mercury offers rideshare insurance as an add-on to their general personal auto policies. This being said, although Mercury is only available in limited states, they offer a very affordable option for this type of specialized coverage.

On the whole, Mercury’s rideshare insurance covers:

  • Gaps in liability insurance coverage between standard auto policy and policy from the rideshare company
  • Medical payments in event of an accident
  • Damage to other vehicles in the event of an accident
  • Repair of your car in the event of an accident

When added to their general auto coverage, therefore, Mercury offers protection at all stages of the rideshare process.

If Mercury provides coverage in your state, you can fill in your information online to quickly and easily receive a free quote.

4. Allstate

Next, Allstate’s “Ride for Hire” coverage can provide you with rideshare insurance for only $15 to $20 on top of your annual premium. With Allstate’s add-on endorsement, you’ll receive coverage during Periods 2 and 3 of the rideshare process—both covering gaps in your policy from the rideshare company, as well as offering extra coverage in addition to that policy.

This being said, Allstate can also provide deductible gap coverage to help reduce your out-of-pocket expenses. Like many of the other providers we’ve reviewed, you can receive a free quote from Allstate online, as well as use their search tool to locate an agent in your area.

Moreover, with 47 out of 50 states covered, Allstate offers the widest reach of any of our rideshare insurance providers.

5. Progressive

Finally, Progressive offers their rideshare insurance as an endorsement to their personal auto policies. Like the other providers we’ve discussed, this coverage provides protection to fill in the gaps of your personal auto and rideshare company insurance policies.

In addition, Progressive’s rideshare insurance coverage protects delivery drivers as well—including those who work for Uber Eats, Doordash, among others.

Moreover, Progressive also provides rideshare insurance coverage through their for-hire livery policies. These policies are actually a type of commercial auto policy—and they’re typically used for businesses that transport passengers in luxury vehicles or taxis.

If, however, your state requires commercial auto insurance for rideshare drivers, or standard rideshare insurance isn’t available from Progressive in your state, you might be able to work with them to get coverage from a for-hire livery policy. Because these are commercial auto policies, however, livery policies are typically more expensive than rideshare insurance.

How to Buy Rideshare Insurance

Whether you turn to your personal auto insurer or decide to switch to a new company altogether, most of these providers can offer you a free quote online. To get a free quote online or receive one from an insurance agent, you’ll want to be able to provide the following information:

  • Car year, make, and model
  • Which ridesharing companies you drive for
  • Average number of monthly rideshare trips and average number of miles driven per trip
  • Driving record
  • Copy of driver’s license (including for anyone else who’ll be driving the car), vehicle registration, and title
  • Policy number for your current personal auto policy

If you’re unsure about how many miles you’ll be driving for Uber or Lyft, you can always look up your prior trip history to get an estimate or use a mileage tracking app.

The Bottom Line 

Rideshare insurance is essential if you’re driving for Uber, Lyft, or a similar ride-hailing company. No matter how careful you are or how clean your driving history is, there’s always the chance that an accident could occur or another driver could hit you.

You should always carry proof of insurance while driving, whether for personal use or ridesharing. If you experience an accident, make sure you report the accident to the police and get the other driver’s insurance information. You should file a claim with your personal auto insurance company, as well as with Uber and Lyft’s insurance provider. The insurance companies will work out who pays what part of the claim.

Remember, your personal auto policy won’t work while your rideshare app is on, and the insurance provided by Uber and Lyft doesn’t cover all the gaps. To be covered at all times while driving, you should get a ridesharing insurance extension to your personal auto policy.

Article Sources:

  1. Uber. “Uber Driver Insurance
  2. Lyft. “Insurance
  3. NYC Taxi and Limousine Commission. “Get a License

The post Rideshare Insurance: Coverage, Costs, & Best Options for Drivers appeared first on Fundera Ledger.

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