What Rideshare Drivers Need to Know About Car Insurance

Rideshare companies offer insurance coverage for drivers when you’ve accepted a ride or are transporting passengers.² However, they provide limited insurance coverage if you’re waiting for a ride request.

The period while the app is on and you’re waiting for a request is often called Period 1. During Period 1, rideshare companies only provide minimal insurance coverage. At the same time, your personal car insurance may not cover accidents during Period 1 either.³ This period is sometimes referred to as an insurance gap; if you get into a car accident while the app is on, you are technically a contractor for Uber or Lyft, so your personal insurance company won’t pay any claims.

You must tell your insurance company that you use your car for commercial purposes. They could cancel your policy if you don’t disclose that you drive for Uber or Lyft.

Before we break down rideshare company insurance, let’s define the steps of the ridesharing process as follows:

• Period 1: The app is on and you’re waiting for a request.
• Period 2: You’ve accepted a ride request and are driving to the pickup location.
• Period 3: There are passengers in your car.

Most states require rideshare companies to provide insurance to their drivers. Understand how much coverage you have before you sign up in case you need to fill in the gaps with a rideshare endorsement, rideshare policy, or commercial policy. Here is a rundown of the driver coverage that Uber and Lyft offer:

If you are an Uber or Lyft driver but are NOT online, you are not eligible for any coverage under Uber or Lyft. Your usual auto insurance coverage will apply.

Optional Injury Protection with Uber

In most states, Uber offers optional Injury Protection insurance. This coverage provides extra protection during periods 1,2, and 3. Premiums are determined by the amount of driving you do for Uber, and cost $0.024 per mile when you’re on a trip. This premium is deducted automatically from each trip, and can be viewed in your earnings report.⁴

Uber drivers can sign up for Optional Injury Protection directly through their Uber account. Uber’s optional Injury Protection includes:

• Accident and Medical expenses up to $1,000,000
• Temporary disability up to $500 a week
• Continuous total disability up to $500 per week
• Accidental dismemberment up to $200,000
• Survivor benefits up to $150,000

Those who work for DoorDash, Uber Eats or other delivery driving services may be wondering if the same rideshare insurance rules apply to them. The short answer is yes.

Given that most standard insurers will not provide coverage if you are using your vehicle for business purposes, it is highly recommended that delivery drivers get either rideshare or commercial insurance. Depending on the company you are delivering for, you may find you get some basic level of coverage (as with rideshare driving):

Different Coverage Options

For many delivery drivers, rideshare coverage will be able to fill the gaps in coverage they need while out on delivery. However, some insurance companies such as American Family recommend rideshare drivers look into commercial insurance plans versus rideshare coverage.

The following insurance options are available for rideshare drivers:

• Rideshare Coverage: Like rideshare drivers, food delivery drivers will likely find that if they get into an accident while waiting for an order or going to pick an order up, they are not covered by their regular auto insurance. A rideshare coverage plan from an insurance provider can cover them while they’re between orders. Still, some rideshare coverages may not cover you while you’re out on delivery—confirm with an agent or representative exactly what your policy covers.
• Commercial Insurance Policy: A commercial insurance policy can cover drivers while they’re out on delivery, though it can be a more expensive option—those who drive for business are often considered higher risk as they often drive more frequently.
• Business Use Endorsement: Best for seasonal delivery drivers, a business use endorsement can be added to an existing policy for a limited amount of time. This can customize an existing business policy so you’re only paying for the type of coverage you need.

An insurance agent may be able to help you determine the best insurance option for you as a delivery driver.

There are two ways to add rideshare insurance to your car insurance policy. The most common way is to add a rideshare endorsement to your policy. Also called a ride-hailing insurance endorsement, the rideshare endorsement fills in the gaps between the transportation network company (TNC) you work for and your personal auto insurance policy. Your rideshare endorsement will include all of the coverages on your personal policy, including collision and comprehensive insurance.

Another option some insurance companies offer is to convert your existing personal plan into a hybrid personal and commercial insurance policy. This option is usually available if the company does not offer a rideshare endorsement in your state.

In most areas, a personal insurance policy is enough to qualify for the rideshare company’s insurance coverage; however, in New York City, you may need commercial car insurance or a commercial driver’s license to drive for Uber or Lyft.⁵ Rideshare companies determine driver qualifications, so check out the requirements to drive for Uber⁶ or Lyft⁷ in your state.

With millions of Uber and Lyft drivers working today, more and more auto insurance companies are offering rideshare insurance.⁸ Below is a rundown of the top rideshare policies available.

Allstate

Allstate auto insurance offers a Ride for Hire policy endorsement. In Period 1, Allstate’s endorsement coverage kicks in after your personal policy and the TNC policy. In Periods 2 and 3, when the TNC policy likely applies, Allstate will provide deductible gap coverage for damages to your vehicle of up to $2,500.⁹

State Farm

State Farm’s rideshare endorsement, also known as Transportation Network Company Driver Coverage, covers you throughout all three periods. In Period 1, coverage extends from your auto policy and may include liability coverage, physical damage coverage, and emergency roadside service. In Periods 2 and 3, the same coverage minus liability to others may apply. Again, the rideshare insurance coverage available to you depends on your state.¹⁰

Progressive

Add rideshare coverage to your existing policy so you’re protected whether or not you’re working. Progressive requires you to add rideshare insurance to your personal auto policy. During Period 1, Progressive provides comprehensive, collision, uninsured/underinsured motorist, personal injury protection, rental car reimbursement, and roadside assistance. During Periods 2 and 3, when the TNC’s policy takes over, Progressive will still provide rental car reimbursement and roadside assistance.¹¹ In most states, Progressive’s rideshare policies also cover delivery drivers.

GEICO

GEICO offers limited rideshare coverage in some states and situations. Customers interested in GEICO’s rideshare coverage should contact GEICO or a local GEICO agent to learn more about availability.

American Family

Rideshare coverage from American Family provides the same coverages as your personal policy, such as collision and comprehensive, medical expense, personal injury protection, and uninsured motorist bodily injury. It does not cover the period of time after you’ve accepted a ride request, the period between dropping off a customer and notifying the app you’re ready for another customer. American Family advertises that its rideshare coverage is not designed for delivery drivers—instead, it advises delivery drivers to consider a more specialized commercial auto Insurance policy.

Travelers

In some but not all states, Travelers offers limited rideshare coverage as an add-on in Period 1 only. Travelers does not offer rideshare coverage in California.

Farmers

Farmers’ customers can purchase an optional rideshare plan by calling an agent. A rideshare policy with coverage will extend your personal insurance policy into Period 1.

Bristol West

Bristol West specializes in insuring high-risk drivers which other insurers may not, and rideshare coverage can be added as an optional add-on. Its coverage fills the gaps between your personal insurance and TNC coverage for Periods 1, 2 and 3. An agent can advise you if Bristol West rideshare coverage is available in your state. Its rideshare coverage also includes delivery drivers.

The cost of your auto insurance depends on several factors. Adding coverage, including a rideshare endorsement, will impact the cost of your policy in most cases. Expect your premium to increase by between $6 and $30 per month if you add a rideshare endorsement to your existing policy.

Unfortunately, the coverage offered by your rideshare company paired with your personal auto insurance coverage is unlikely to give you the full protection you need as a rideshare driver. Optional rideshare coverage can help fill this gap.

Fortunately, depending on your provider, rideshare coverage can be as low as an additional $5 a month. Many auto insurance providers offer rideshare insurance as an optional add-on. In many circumstances rideshare coverage simply extends your existing auto insurance coverage into Period 1—the period where you may otherwise be left with a gap in your protection.

We recommend rideshare and rideshare delivery drivers shop around for rideshare insurance quotes, beginning with their existing auto insurance provider, to find the best rideshare insurance to suit their needs.