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Rideshare Car Insurance

Technology companies have made using your personal vehicle profitable for business endeavors like ridesharing or moving services. There are over a million drivers providing Transportation Network Companies (TNC) services for Uber and Lyft combined. With the general familiarity of the two companies’ practices, you’re aware that they don’t issue company cars and drivers use their personal vehicles. TNC companies often hold their drivers’ cars to a high-quality standard, and if they become reliable, they’ll turn a major profit.

Think of ridesharing from an auto insurance coverage perspective now. The “personal” in personal auto insurance is meant literally. With personal coverage, you wouldn’t be insured using your car for business purposes. A form of commercial liability insurance is required 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 coverage. Commercial coverage can be a strain on your budget in that regard. 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 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 and rideshare insurance. In ridesharing, the company will issue its own insurance for its drivers. But it’s not without its limits.

A TNC company’s insurance for their drivers covers them when they’re transporting a passenger client. If anything were to happen while you serviced a customer on the clock, you would be covered. However, the coverage gets iffy when it comes to waiting for a customer while in your car. When a TNC 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 auto insurance doesn’t cover you during this time because you’re technically working. The coverage which your TNC company provides is extremely limited during this time. The TNC company is just there to insure you and the passenger(s). So, during times when you’re driving around waiting for customers-there may be gaps in your coverage. Ride-hailing insurance is there to prevent gaps in your coverage and 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 coverage. 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 policy. 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, but you’ll also be able to turn a profit. On-demand delivery drivers working for places like UberEats or GrubHub are also examples of when you might need ride-hailing coverage. In that case, the food is the passenger and must be insured.

What is an insurance gap?

A gap in your 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. Not only would you be responsible for the damages, but your premiums may also increase for driving uninsured. The extremely limited coverage provided by Uber and Lyft can lead to gaps in your coverage. This is why having rideshare 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 coverage gaps may occur when you’re working. Technically, you’re on the work clock when you turn on your TNC app.

Here are some times (or stages) of ridesharing and the coverage they allow for:

  • Stage 0 – You’re simply in your car, and your ridesharing app is turned off. Unless you turn on the app, then you’re covered by your personal auto policy.
  • Stage 1 – You’ve turned on your 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 because you are driving for business purposes, and the coverage from the ridesharing company may be limited.
  • Stage 2 – A ride request came through, and you’re on your way to pick up your customer. At this point, the coverage provided by the TNC company kicks in, and you’re covered for this period.
  • Stage 3 – The rideshare passenger has entered the car, and you’re driving them to their destination. Your TNC company policy still covers you at this point. You’re on the job and transporting a customer. As you can see, the insurance gap is in stage 1.

What does rideshare insurance cover from an insurance company?

Auto insurance companies like InsuranceNavy offer full rideshare insurance policies that avoid the gaps for an affordable price. Rideshare coverage can be bought from your insurer as an add-on to your existing policy or as a whole new coverage. These policies can provide comprehensive and collision coverage during stage 1. The deductibles are cheaper than those of Uber and Lyft, so it’s not only the smarter choice for coverage but also the more economical one.

Rideshare insurance functions exactly like your personal policy. Collision, comprehensive, medical, and personal injury coverage are included. The coverage issues by the ridesharing company can also include all these, but only for stages 2 and 3. The stage 1 coverage they offer only covers property and people involved in an accident that you caused.

Rideshare insurance from the 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 ride-hailing policies are and what they cover. Now, we’ll share how to get it, the costs, and some of the technical terminologies to know about.

What are commercial insurance and hybrid insurance?

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 ride-hailing 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, the type of hybrid policy that is available combines personal auto coverage and ridesharing into one 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 ridesharing insurance?

Shopping around for the right ridesharing coverage can be like shopping for car insurance. You’ll want to compare and contrast a couple of quotes from insurance companies that offer ride-hailing insurance and be mindful of how much you work.

Here are some tips when shopping for a rideshare policy:

  • Plan for accidents – Ask yourself if you’re able to afford your TNC company’s deductible in the event of an accident with a passenger. If you’re unable to keep up with the cost, then ride-hailing 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.
  • 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 for ridesharing. 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.

How much does this type of auto insurance cost when added to a personal policy?

Rideshare insurance is a low-cost, economical choice for people who want to be covered while working for a transportation network 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 uneven insurance, with deductibles going 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 place of residence. These are typical insurance factors. It’s this reason that this policy is also a great option for part-time rideshare drivers. If you invest in ride-hailing insurance, you can expect your deductibles to be less than $1,000.

How do rideshare insurance costs compare 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 difference, 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 stages. However, aside from the massive price difference, here’s how commercials and rideshare are different.

A commercial policy is best used for a vehicle that is used wholly for business. The reason why rideshare is such a popular option is that Uber and Lyft drivers tend to be part-time. Part-time is key to ride-hailing 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 is essentially an affordable way to bridge the two coverages together for drivers looking to make some money on the side.

What will I get if I buy rideshare car insurance?

Aside from saving hundreds (if not, thousands) on an annual basis and your personal insurance being extended to cover the stage 1 gap, here’s what else ride-hailing insurance can do for you:

  • Comprehensive insurance is added to your coverage for stages 2 and 3. Under normal circumstances, the only damages that would be covered would be the ones you caused to another car or person.
  • Lower deductibles are a guarantee when it comes to ride-hailing insurance. They’re usually calculated by finding the difference between your personal auto 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.