Rideshare Insurance Coverage
Insurance Coverage for Uber, Lyft, and other Transportation Network Companies (TNC)
Technology companies have made using your personal vehicle profitable for business endeavors like ridesharing services.
There are over a million drivers providing Transportation Network Companies (TNC) services for Uber and Lyft combined. A Rideshare company often holds their drivers’ cars to a high-quality standard, and if they become reliable, they’ll turn a major profit.
To make sure you’re properly protected, you’ll need to look into getting rideshare insurance coverage.
Think of ridesharing from an auto insurance coverage perspective now. The “personal” in personal auto insurance is meant literally. With a personal policy, you wouldn’t be insured using your car for business purposes.
A form of commercial liability insurance is required, commonly referred to as rideshare insurance, when a personally owned vehicle is on the work clock.
However, it’s all about profits in the ridesharing business, so you don’t want to spend too much on your rideshare insurance coverage.
Commercial car insurance is expensive and can be a strain on your budget. Fortunately, there’s a cost-effective way to insure your car and yourself with rideshare insurance.
What is rideshare insurance?
When you’re driving your car to work, errands, or just in general-then your personal policy with collision or comprehensive insurance will cover you for any traffic-related accident you may have during that time.
“During that time” is key when it comes to commercial car insurance and rideshare insurance. In ridesharing, the company will issue sometimes its own rideshare insurance for its drivers. But rideshare insurance it’s not without its limits and the auto insurance coverage provided can vary in different states.
A TNC company’s rideshare insurance covers their drivers only when they’re transporting a passenger client with their app. If anything were to happen while you serviced a customer on the clock, you would be covered under their rideshare insurance.
However, the auto insurance coverage that’s provided gets iffy when it comes to waiting for a customer while in your car. When an Uber and Lyft app is first turned on, it will begin to search for passengers. During that time, you may be driving around to the customer hotspots.
Your personal policy doesn’t cover you during this time because you’re technically working. The rideshare insurance which your TNC company provides is extremely limited during this time. The rideshare company is just there to insure you and the passenger(s). So, during times when you’re driving around logged into the app waiting for customers-there may be gaps in your car insurance coverage.
A Ridesharing insurance endorsement is there to prevent gaps in the rideshare insurance coverage provided from Uber and Lyft and to make sure you’re covered from the moment you switch your rideshare app on to when you switch it off.
When would I need rideshare insurance?
Naturally, if you’re in the rideshare business, you’ll want the appropriate rideshare insurance endorsement. There are some states where full-time ride-share drivers are required to get the more expensive commercial insurance for work.
Still, full-time TNC drivers may also opt for a rideshare insurance policy endorsement. If you’re working with a transportation network company part-time or on the side, then rideshare insurance is the smart and economical option.
Not only will you be covered the entire time you work with their app, but you’ll also be able to turn a profit. On-demand delivery drivers working for places like Uber Eats or GrubHub are also examples of when you might need rideshare insurance coverage. In that case, the food is the passenger and must be insured.
What is an insurance gap in a rideshare policy?
A gap in your car insurance refers to a lapse in your auto coverage. There may be accident circumstances where you wouldn’t be covered, such as driving around waiting for your next rideshare client from the app. Not only would you be responsible for the damages, but your premiums may also increase for driving uninsured.
The extremely limited rideshare insurance coverage provided by Uber and Lyft can vary and lead to gaps in the rideshare insurance coverage provided in many states. This is why having a rideshare insurance endorsement is a smart decision-so, you’re covered at all times.
How do I know I’m covered when I’m ridesharing?
If you’re a regular rideshare driver, then it’s imperative to know when those rideshare insurance coverage gaps may occur when you’re working. Technically, you’re on the work clock when you turn on your Uber and Lyft app.
Here are some times (or periods) of ridesharing and the rideshare insurance coverage provided:
Period 0 Coverage
You’re simply in your car, and your Uber and Lyft app is turned off. Unless you turn on the app, then you’re covered by your personal policy.
Period 1 Coverage
You’ve turned on your Uber and Lyft app and are waiting for a ride request. You may be driving around for this part. If any accident happened during this time, you might not be covered under your personal policy because you are driving for business purposes, and the car insurance coverage provided by the ridesharing company may be limited.
Period 2 Coverage
A ride request came through the Uber and Lyft app, and you’re on your way to pick up your customer. At this point, the auto insurance coverage provided by the rideshare company, usually Uber and Lyft kicks in, and you’re covered for this period.
Period 3 Coverage
The rideshare passenger has entered the car, and you’re driving them to their destination on the app. Your rideshare company policy still covers you at this point. You’re on the job and transporting a customer. As you can see, the car insurance gap is in period 1.
Rideshare Insurance Coverage for Uber and Lyft
Auto insurance companies like Insurance Navy offer full rideshare insurance policies that avoid the gaps for an affordable price. A Rideshare insurance endorsement can be bought from your insurer as an add-on to your existing personal policy or as a whole new car insurance policy.
These car insurance policies can provide comprehensive and collision coverage during period 1. The deductibles are cheaper than those of Uber and Lyft, so it’s not only the smarter choice for rideshare insurance coverage but also the more economical one.
Rideshare insurance functions exactly like your personal policy. Collision, comprehensive, medical, and personal injury coverage are provided. The rideshare insurance coverage issues by the ridesharing company’s can also include all these, but only for periods 2 and 3. The period 1 rideshare insurance coverage they offer only covers property and people involved in an accident that you caused.
A Rideshare insurance endorsement from an insurance company enables you to be covered in that event so you won’t be stuck with associated costs of personal car repair or medical fees. By now, you understand what rideshare insurance policies are and what they cover.
Now, we’ll share how to get rideshare insurance, the costs, states it’s available in and some of the technical terminologies to know about.
What’s the difference between commercial insurance and rideshare?
Earlier, commercial and hybrid insurance was mentioned. Commercial insurance is usually a must when you’re driving for business reasons. This can be a number of reasons beyond ridesharing like cargo transport or delivery.
Truck drivers who use their own vehicles often purchase commercial coverage to be insured while driving on the job. Compared to rideshare insurance, commercial insurance is expensive and not worth it.
In traditional insurance, the idea of a hybrid policy is to combine two aspects of coverage together in one affordable policy. Some insurance companies may do this by combining life insurance with care benefits.
When it comes to ridesharing with an app, the type of hybrid policy that is available combines a personal policy and rideshare insurance into one insurance policy with one set of premiums. This policy is particularly handy because you would be able to use your car for personal and business reasons and still be insured.
How do I get Rideshare Insurance?
Shopping around for the right rideshare insurance coverage can be like shopping for car insurance. You’ll want to compare and contrast a couple of quotes from insurance companies that offer rideshare insurance and be mindful of how much you work.
Here are some tips when shopping for a rideshare insurance policy:
- Plan for accidents – Ask yourself if you’re able to afford your rideshare company deductible in the event of an accident with a passenger. If you’re unable to keep up with the cost of the deductible, then rideshare insurance may be a better option.
- Consider how much you work – Now, ask yourself how much on average you use your car for work-related purposes. Use this knowledge to determine how much coverage you need-comprehensive, collision, rental reimbursement, etc, and also how high a deductible you choose
- Compare and shop – As with any case of insurance shopping, you’ll always want to receive as many quotes as you can. The best ridesharing policies can either be national or regional.
- Always inform your insurer – Your insurance company must be made aware that you’re using your car with a ridesharing app. You should always keep your insurance company in the loop on whether or not you’ll be using your personal vehicle for business. Not informing your insurer can result in claims being unpaid or your coverage being canceled or dropped altogether.
Rideshare Insurance Cost
Rideshare insurance is a low-cost, economical choice for people who want to be covered while working for a transportation networks company like Uber or Lyft.
Commercial insurance is the mainstream option, but it can get expensive at times. As previously discussed, a TNC can have its own insurance, with the deductible costing anywhere from $1,000 to $2,500.
A rideshare insurance policy can cost upwards of $27 a month. Some states can even offer some coverage at $9 to $15 a month as well. Like any other policy, how much you pay will be dependent on your insurer, car, driving history, age, and states you reside in. These are typical insurance factors.
It’s for this reason that this policy is also a great option for part-time rideshare drivers. If you invest in rideshare insurance, you can expect your deductible to be less than $1,000 in most states.
Rideshare insurance costs compared to commercial insurance costs
With rideshare insurance, your yearly bill would look like $350 at the very most. The annual cost for standard commercial insurance is $1,200 or double that. With that kind of savings, it seems a no-brainer which option would better suit your budget. Both prevent a gap in insurance when using a personal vehicle for work-all 4 of the periods.
However, aside from the massive price difference, here’s how commercials and rideshare insurance are different.
A commercial policy is best used for a vehicle that is used wholly for business. The reason why rideshare insurance is such a popular option is that Uber and Lyft drivers tend to be part-time.
Part-time is key to rideshare insurance because the policy is an add-on to your existing personal auto policy. A work vehicle wouldn’t have a personal policy because they’re rarely used for personal reasons.
Rideshare insurance is essentially an affordable way to bridge the two coverages together for rideshare drivers looking for savings.
Rideshare Insurance Benefits
Aside from big savings, sometimes hundreds (if not, thousands) on an annual basis and your personal policy being extended to cover the period 1 gap, here’s what else rideshare insurance can do for you:
- Comprehensive insurance is added to your coverage for periods 2 and 3. Under normal circumstances, the only damages that would be covered would be the ones you caused to another car or person.
- A Lower deductible is guaranteed when it comes to rideshare insurance. They’re usually calculated by finding the difference between your personal auto policy deductible and the deductible issued by the rideshare company.
- Peace of mind knowing that you are receiving full coverage. The sweetest achievement of all is that feeling of knowing that you are covered during work and can now profit off your ridesharing gig.
Find out if rideshare insurance is available for you today. Get a Quote Online from InsuranceNavy or visit one of our convenient locations today.
Rideshare Insurance FAQ
What Are TNCs?
TNC is an abbreviation that stands for Transportation Network Company. Some famous TNCs include Uber and Lyft, but it is a general term describing any ridesharing company that operates via an app and offers on-demand rideshare services.
These companies do not use a fleet of company-owned vehicles, like taxi companies, and instead, Rideshare company drivers use their own personal vehicles to transport customers. They respond to ride requests via the designated rideshare company mobile app.
What Are The TNC Driving Periods?
There are four periods, or stages, a rideshare company driver goes through when completing a ride:
- Personal - This is when you are driving your vehicle for personal reasons. The rideshare app is off, and you are not accepting rides yet.
- Period 1 - You are driving your personal vehicle and have turned the TNC app on. You are waiting for notification about a ride request in your area.
- Period 2 - You have been notified about a drive request in the area and have accepted it, but you have not picked them up yet.
- Period 3 - You’re driving your passenger(s) where they need to go. You arrive at their destination, and the passenger(s) exit your vehicles.
Do Personal Auto Policies Cover Rideshare Drivers?
No, a personal auto policy will not cover you when you are operating as a rideshare driver. Personal auto policies only are valid when you are using your vehicle for personal, not for business, use.
If you are transporting rideshare service clients and end up in an accident, you would need to enact your rideshare insurance policy in order to receive any coverage.
Do Rideshare Drivers Need Rideshare Insurance Coverage?
Yes. A Personal policy does not cover commercial driving, which is what you are doing as a rideshare driver.
However, at the same time, TNC companies offer little to no protection when drivers are in Period 1 of the rideshare service period. This means if you are to get into an accident in between drives or at the start of a shift, it will most likely be up to you to cover damages to your vehicle.
Make sure your liability coverage is also extensive enough to cover any injuries or damage to the other party in case you are found to be at fault.
When is Rideshare Insurance Active?
A rideshare insurance policy will fill in the coverage gaps to provide you with insurance in the Period 1 of the drive cycle. This is when the ridesharing app is on, but you have not accepted a fair yet. You are in the waiting periods, typically already in your vehicle either at the beginning of a shift or after having just completed a drive.
TNC commercial insurance coverage is typically not active during this period, leaving a gap in insurance. Throughout the ride, rideshare insurance is still active and combines with the TNC commercial coverage in order to provide maximum protection should it be needed.
How Are Rideshare Drivers Protected With Rideshare Insurance?
Rideshare insurance typically comes into play during Period 1. Period 1 can be a dangerous time for TNC drivers as their personal insurance will not assist them, but it’s too early in the rideshare period for the TNC commercial coverage to kick in.
Rideshare insurance fills in those moments of gaps in coverage. If you end up in a collision during Period 1, you will be covered by rideshare insurance. Any passengers you have picked up or are about to pick up during that time will also be protected.
How Much Does Rideshare Insurance Cost?
The cost of rideshare insurance varies from one driver to another. There is no universal rate. How much you pay will be based on personal factors and how much coverage you would like.
You typically need to have a preexisting auto insurance policy to add on rideshare insurance. Contact an insurance agent to see what the requirements are and to get started with a free quote.
Who is Eligible For a Rideshare Insurance Policy?
Pretty much anyone can purchase auto insurance so long as they are a valid driver. Rideshare insurance follows the same principles. Typically anyone can purchase it.
Where you may run into some issues is if you have a questionable driving record. If you are deemed a high-risk driver by a provider, you may be denied coverage and would have to go through an insurer that specializes in policies for such drivers.
Getting a quote and working with an insurance agent is the best way to see what your insurance eligibility looks like.
What is The Minimum Coverage Required For a TNC Driver to Purchase a Rideshare Insurance Policy?
There is typically no set minimum you must meet in order to purchase a rideshare insurance policy. At the very least, companies will require you to carry a personal auto insurance policy with them and then purchase rideshare insurance as a policy add-on. Keep this in mind when shopping for rideshare insurance.
Can You Cover Multiple Vehicles With Rideshare Insurance?
Yes. As long as you have an existing auto insurance policy that lists all vehicles you intend to use, you can add rideshare insurance to them.
There is no limit to how many vehicles you wish to list on your insurance policy. It’s best to make sure everything is properly covered, so you are not caught underinsured.
Do Rideshare Insurance Policies Cover You if You Drive Another Vehicle?
If you have not added rideshare insurance to the vehicle, then no. Any vehicle you are using to operate as a TNC driver needs to be mentioned on your auto insurance policy so it can receive the proper coverage.
This is how you get the best protection for both you and your passengers. If you fail to disclose a vehicle on your auto policy, your insurance will not be able to provide you with coverage.
Do All Your Vehicles Need Rideshare Insurance Coverage?
If you own more than one vehicle, only the car you use as a TNC driver needs rideshare insurance coverage. Due to this, you are able to purchase one policy for all your cars and just include the rideshare coverage where needed.
If you switch between vehicles each time you go out as a TNC driver, then you would need to add the coverage to every vehicle being used.
Who Does Rideshare Insurance Policies Cover?
Rideshare insurance policies will cover the TNC driver along with any passengers in the vehicle at the time of the incident. Any family members you have listed on the rideshare insurance policy as drivers of this particular vehicle will also be covered. They can be covered by your personal auto insurance policy as well.
The big key thing about rideshare insurance, though, is that it provides you coverage while working and protects your customers.
Get a Rideshare Insurance Quote Today
Interested in rideshare insurance? Reach out to one of our expert agents to customize a free quote.
Make sure you let us know the type of vehicle you are looking to insure, any valuables you wish to include in the policy, and the names of everyone (your family, friends, etc.) planning to operate the vehicle.
By providing us with this information, we get a better idea of the coverage you need. You can get a quote from us either at one of our many locations or online via our website and mobile app.
We are also just one call away. We have live agents standing by in our call center. Get your car insured today and drive worry-free tomorrow.