Guide to Rideshare Insurance in California

When you drive for a rideshare company like Uber or Lyft, the company’s insurance coverage applies when you are transporting passengers. However, the coverage is limited when you are waiting for a ride request.

Since 2015, California car insurance laws have required rideshare drivers to maintain additional coverage when the app is open but you still need to match with a passenger, also known as Period 1. Although rideshare companies do provide some liability coverage during this period, it’s often not enough to fully protect you in the event of an accident.

Additionally, rideshare drivers are classified as independent contractors. This means most personal auto insurance policies won’t cover accidents that occur while the rideshare app is active. As a result, rideshare coverage is necessary to bridge the gap between your personal policy and the limited coverage provided by the rideshare company.³

The ridesharing process is divided into three phases:

• Period 1: The rideshare app is open, and you’re waiting for a match.
• Period 2: You’ve accepted a match, and you’re driving to pick up your passenger.
• Period 3: You’re transporting passengers in your car.⁴

Rideshare companies usually provide insurance to drivers in all states, although the amount of coverage may vary by state. By knowing what limits rideshare companies offer, you can get an idea of how much rideshare coverage you’ll need. Here’s a breakdown of coverage from Uber and Lyft:

Additionally, Uber drivers in California are automatically enrolled in injury protection for all drivers at no cost. This covers drivers’ medical expenses if they’re hurt in an accident. You don’t need to be a registered driver in California to take advantage of this coverage, since it applies to all Uber drivers operating in the state.

Lyft offers similar coverage with its occupational accident insurance program, which provides medical expense and disability benefits to drivers in California. As long as the covered accident happened in California, you’re eligible for occupational accident benefits.⁵

Even if you’re delivering food for Uber Eats or groceries for Instacart, you’ll still need rideshare coverage. As a delivery driver, you’re considered an independent contractor, which means you’re not covered by your personal insurance when the app is on. To fill the coverage gap, add rideshare or commercial insurance to your policy.

Like Uber and Lyft, a few popular delivery services offer some coverage to their drivers.

In addition to purchasing rideshare coverage, you’ll need to follow certain rules set by the California Public Utilities Commission. You must do the following:

• Display Uber or Lyft stickers on your car windows while the app is on
• Pass a background check every year
• Ensure your vehicle meets California’s climate emission standards
• Pass a vehicle inspection every 12 months or after 50,000 miles
• Accept service dogs when transporting passengers (drivers may not request proof that the dog is a service animal)⁶

Under Proposition 22, rideshare drivers are classified as independent contractors rather than employees in California. This means you aren’t entitled to traditional employee benefits such as unemployment insurance or workers’ compensation.

However, Prop 22 provides some benefits if drivers meet certain work-hour criteria. For example, drivers who work at least 30 hours per week are eligible for health care subsidies, and drivers who work at least 15 hours per week qualify for injury coverage while on the job. This coverage helps protect drivers against job-related injuries, but it’s not as extensive as traditional workers’ compensation.

Some argue that Prop 22 preserves flexibility for drivers, allowing them to set their own hours and work schedules. However, the law has faced legal challenges, with others arguing that it doesn’t go far enough to protect workers.⁸

In California, rideshare coverage typically adds between $10 and $25 to your monthly premium, depending on your driving history and provider.

The following companies offer rideshare insurance in California:

On average, California drivers pay $1,939 annually for full coverage insurance, so you can expect a full coverage policy with rideshare coverage to cost between $2,059 and $2,239 per year.

If you’re a rideshare or delivery driver in California, it’s essential to add rideshare coverage to your personal auto policy. Although Uber and Lyft provide insurance during most phases of the rideshare process, there’s a gap in coverage when the app is on but you’re waiting to be matched with a passenger. Rideshare coverage bridges this gap and ensures you’re fully protected.

If you can’t find rideshare coverage or you use your vehicle for business purposes beyond rideshare and delivery, a commercial auto policy may be a better option.

Fortunately, rideshare coverage is typically affordable, costing around $10 to $25 extra per month. To get the best value and protection, compare rates and coverage options from multiple insurers.