As a rideshare driver, you should know 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, 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.
Rideshare insurance provides liability and damage coverage for rideshare drivers (e.g., Lyft or Uber). Coverage is also available to delivery drivers, like those who drive for Instacart, Grubhub, or Seamless.
According to the Federal Trade Commission, commercial auto insurance typically does not cover business-related damages.[1] Therefore, rideshare insurance bridges the coverage gap between your personal auto policy and the insurance policy provided by the rideshare or delivery company.
When it comes down to it, three different insurance policies 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.
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.
Your rideshare insurance coverage depends on which ridesharing period the incident occurs. Uber and Lyft break down the ridesharing process into four periods:
As you can see, Period 1 only offers limited liability coverage, but you gain comprehensive coverage during Periods 2 and 3—when you’re picking up or transporting riders.
Next, let’s look at a breakdown of Uber’s and Lyft’s insurance coverage for each period:
Rideshare Period | Insurance 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) |
As we’ve explained, rideshare insurance is intended to provide gap coverage—especially during Period 1, when your personal auto policy does not cover you, 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:
These types of coverage, referred to as collision coverage, comprehensive coverage, and uninsured/underinsured motorist coverage, respectively, protect you during Period 1, where your other policies do not cover you.
Some rideshare insurance policies also offer more coverage options, and sometimes even add onto or replace your personal auto policy. This extra coverage might include:
Generally, the cost of rideshare insurance ranges from about $15 to $120 per year. The cost varies by the provider, policy, and the state where you’re driving. Also, rideshare insurance is often an add-on to your existing auto insurance plan, making it reasonably affordable.
John Frigo, a digital marketing lead at MySupplementStore and former rideshare driver, pays an additional $15 to $17 monthly to add rideshare coverage to his State Farm personal auto insurance plan.
The deductible, the specific amount you must pay before the insurance company pays out benefits, for common incidents range from $250 to $2,000.
Overall, the lower your deductible, the higher your annual premium. To save on 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.
Big-name auto insurance companies, like Geico, State Farm, and Progressive now offer rideshare insurance, but with some limitations. Some insurance companies provide only hybrid policies—rideshare insurance is available only as an add-on to your existing personal auto policy. Also, some rideshare insurance policies have limited state coverage.
Additionally, rideshare insurance requirements can vary by state and city. For example, New York requires that you purchase commercial auto insurance (which is different than simple rideshare insurance) and apply for a commercial driver’s license.[4]
Keep in mind that you may need to commit to a single insurance carrier. You cannot, for example, have a personal auto insurance policy from Geico and then a rideshare insurance policy from State Farm.
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:
Insurance Company | Type of Policy | Number of States With Coverage | Estimated Cost | Best for: |
---|---|---|---|---|
Add-on to personal auto policy
|
46
|
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
|
9
|
As little as $0.90 per day (plus cost of personal auto policy)
|
Affordable, simple rideshare coverage
|
|
Add-on to personal auto policy
|
47
|
Potentially less than $30 per month
|
Rideshare coverage across the U.S.
|
|
Add-on to personal auto policy
|
35
|
Varies based on your policy
|
Coverage for rideshare and delivery drivers; drivers who need commercial auto policies in their state
|
With 46 out of 50 states covered, State Farm is an excellent option for rideshare insurance for drivers all over the country.[5] State Farm offers rideshare insurance as an add-on to their personal auto policies, providing coverage that includes:
Also, State Farm is affordable—you’ll only pay 15% to 20% more on your current annual premium. For example, if you spend $300 every six 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.
Geico is the only insurance company that offers an all-in-one personal auto and rideshare insurance policy. Instead of an add-on to your personal policy, Geico offers a hybrid policy that ensures you receive the same coverage regardless of whether or not you’re driving rideshare at the moment or not.
Geico’s coverage can include:
You can put in your information online to receive a free quote for Geico’s hybrid rideshare insurance. Our sample quote yielded a $269 monthly cost, which covers personal and rideshare driving.
Like many other providers, Mercury Insurance offers rideshare insurance as an add-on to their general personal auto policies. This being said, although Mercury is only available only in nine states.[6]
Starting for as little as s little as $0.90 per day, Mercury’s rideshare insurance covers:
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.
Next, Allstate’s “Ride for Hire” coverage can provide you with rideshare insurance for “for as little as pennies a day”—you can potentially pay less than $30 monthly.[7] 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 and offering extra coverage.
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 serves the most states on this list.[8]
Finally, Progressive offers their rideshare insurance as an endorsement to their personal auto policies. While not as extensive as State Farm or Allstate, Progressive provides coverage to 35 states.[9]
Also, 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.
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:
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.
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:
Priyanka Prakash is a senior contributing writer at Fundera.
Priyanka specializes in small business finance, credit, law, and insurance, helping businesses owners navigate complicated concepts and decisions. Since earning her law degree from the University of Washington, Priyanka has spent half a decade writing on small business financial and legal concerns. Prior to joining Fundera, Priyanka was managing editor at a small business resource site and in-house counsel at a Y Combinator tech startup.