Rideshare insurance is a type of car insurance policy for drivers who work for a company like Uber or Lyft. The cost of a rideshare insurance policy can vary depending on what company you purchase it from and where you live.
Rideshare Insurance: The Basics
Typically, you can purchase a rideshare insurance policy as a standalone policy, or you can add it to an existing insurance policy. When you buy a rideshare policy that includes car damage coverage and passenger injury coverage, it's usually less expensive than a conventional commercial insurance policy. Rideshare policies also offer more flexibility, which you'll need if you're a part-time driver instead of a full-time driver.
As GEICO points out, while Uber and Lyft provide a limited amount of insurance coverage, you really can't afford to depend on it if you're driving to cover household expenses, pay off student loans, or you're saving up for something. If you don't have a rideshare insurance policy, you risk:
- Your insurance company dropping you from your personal policy
- Falling into coverage gaps that can occur during your rideshare shift
- Having to pay out of pocket for repairs and medical care
According to Allstate, some insurance providers offer a ride-hailing endorsem*nt that you can add to your existing car insurance policy. This type of endorsem*nt covers any gaps in coverage between the policy provided by whichever rideshare company you drive for and your personal car insurance policy. You can also purchase a full ridesharing insurance policy. This policy is separate from your existing insurance policy, and it combines personal and business coverage into one policy.
Allstate also notes that, while major rideshare companies provide insurance for their drivers, many policies don't kick in until you've accepted a ride request. Because personal car insurance policies exclude all business usage, you won't have any coverage at all during the time you're available to hire but haven't accepted a request. A rideshare endorsem*nt can cover those policy gaps by extending your personal policy so that it applies while you're waiting for ride requests.
If an accident occurs while you're waiting for ride requests, the rideshare endorsem*nt can keep you from having to pay out of pocket for repairs. However, it's important to remember that your endorsem*nt only extends the coverage that you already have. For example, if you don't have collision coverage in your existing policy, then the rideshare endorsem*nt won't include collision coverage either.
How Much Does a Rideshare Policy Cost?
The price of rideshare insurance depends on how much coverage you buy. For example, as Nerdwallet notes, adding an endorsem*nt usually costs less than purchasing a separate policy. Also, the higher the limits, the more your provider will charge you for coverage. If you choose to add an endorsem*nt, your limits will typically equal the limits of your existing policy. For example, if your existing policy carries a $100,000 liability limit, then your endorsem*nt will only pay up to $100,000 for a rideshare claim. If you opt for a separate rideshare policy, you'll have to choose the limits.
When purchasing a rideshare policy, you must buy it from the insurance company that you already have a personal policy with. For instance, GEICO won't sell you a rideshare policy if your personal policy is with Progressive. According to Insurify, when you're selecting a rideshare policy, you should make sure to do the following:
- Inform your personal car insurance provider that you're driving for a rideshare company
- Determine the gaps between your personal policy and the policy provided by the company you drive for. Uber and Lyft provide $1 million of liability for drivers while they're transporting packages. Smaller rideshare companies typically offer less coverage.
- Ask your company if they provide rideshare insurance. If they do, gather quotes for a rideshare policy and a commercial policy. Depending on the company, a rideshare policy is usually more affordable, but you'll want to compare quotes to make sure.
Best Rideshare Insurance Companies
The best rideshare insurance company for you is the one that meets your specific coverage needs. According to Investopedia, a rideshare policy from GEICO:
- Offers complete coverage while you're on and off the job
- Does not include mileage restrictions
- Includes coverage if you're driving for a delivery company such as DoorDash or Favor
- Is typically more expensive than other policies
- Is not available in all 50 states
As Insurify points out, a rideshare policy from GEICO is actually a hybrid plan that covers the personal and business use of your vehicle. That means you're covered when your rideshare app is off and when it's on. The GEICO policy also provides coverage for your rideshare passengers. Because GEICO's rideshare policy covers everything, you don't have to file a claim with the company you're driving for if you're ever in an accident.
As Investopedia points out, another rideshare insurance provider, Mercury Insurance, has its own pros and cons. These include:
- Rates starting at $27 a month
- Coverage for mechanical breakdowns
- Coverage for drivers regardless of the rideshare company they work for
- Availability in only eight states
- No online claim filing
Insurify notes that if you're looking for the lowest rates on rideshare insurance, Mercury Insurance is probably your best bet. Many Mercury Insurance customers pay as little as 90 cents a day for a rideshare policy. While GEICO's rideshare insurance is a hybrid policy, a policy from Mercury Insurance only covers the gaps, meaning that your policy with Mercury covers you until you accept a ride request.
State Farm is another insurance provider that offers rideshare coverage. According to Investopedia, a State Farm rideshare policy:
- Is available in most states
- Includes coverage for delivery drivers
- Does not have mileage restrictions
- Only covers gaps in coverage
- Costs more than comparable competitor plans
According to Insurify, a rideshare policy from State Farm tends to be an excellent option for drivers who don't want to invest in a hybrid policy or a commercial insurance policy. State Farm's rideshare coverage is designed to bridge the gap between your personal auto insurance policy and the policy provided by the rideshare company, which is typically what you need if you're a part-time driver.
Check this out if you need additional information, resources, or guidance on car insurance.
Sources:
What Does Rideshare Insurance Cover?
Rideshare Insurance for Drivers: Where to Buy It, What It Covers
Rideshare Insurance: 10 Best Auto Insurance Companies for Uber and Lyft Drivers (2021)
Best Rideshare Insurance Companies
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Hearst Autos Research, produced independently of the Car and Driver Editorial staff, provides articles about cars and the automotive industry to help readers make informed purchasing choices.
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