Will My Insurance Company Cover Me If I Start Driving for Uber or Lyft?
Last Updated on March 17, 2023
So you’ve decided to drive for a ride-sharing company like Uber or Lyft – but you’re curious about how car insurance works.
How does car insurance work for Uber and Lyft drivers? Do you need special car insurance to drive for Uber or Lyft? Should you contact your insurance company and tell them you’re providing ride-sharing services from your personal vehicle?
These are all very good questions. Below, we’re answering every question you have about whether or not you’re covered if you start driving for Uber or Lyft.
- Some Car Insurance Plans Provide Full Coverage, But Most Do Not
- Most Insurance Policies Do Not Cover Ride-Sharing by Default
- Uber and Lyft Cover Rideshare Drivers, But Only at Certain Times
- Most Major Insurance Companies Now Provide Ride-Sharing Insurance as an Option
- Call your Insurance Company or Compare Quotes Online to Get the Best Uber or Lyft Insurance
- Final Word on Insurance for Uber and Lyft
Some Car Insurance Plans Provide Full Coverage, But Most Do Not
The short answer to the above questions is this:
If your car insurance plan has ridesharing coverage, then you’ll be fully covered while working for Uber, Lyft, and any other ride-sharing company. That means any damage to your vehicle, yourself, and the passengers within your vehicle will be covered.
However, if you have a standard car insurance policy, then you probably will not be fully covered. Drivers with a standard insurance plan might only be covered against damage to their vehicle, while damages to themselves or their paying passengers will not be covered.
Confused? That’s okay. Let’s take a closer look at how it breaks down.
Most Insurance Policies Do Not Cover Ride-Sharing by Default
By default, very few car insurance policies will cover ride-sharing. Typically, this is a supplementary policy option only purchased by those who actively work for Uber or Lyft. Insurance companies have no reason to bundle this under an ordinary driver’s insurance policy because most drivers don’t work for Uber or Lyft.
Unless you’ve previously driven for monetary purposes – like running a private delivery business or similar company out of your own vehicle – you probably have a standard insurance plan. If you have a standard insurance plan, then you won’t be protected while driving for Uber or Lyft.
As of 2021, a growing number of insurers offer rideshare coverage. In fact, virtually every major auto insurance provider in the United States offers some type of insurance for Uber, Lyft, Postmates, and other ridesharing and food delivery services.
Below is a list of the insurance companies that offer rideshare coverage and how much it costs.
GEICO (Starting at $5 Per Month): GEICO’s Rideshare Insurance takes the place of your personal auto insurance policy. It covers you whether the app is on or off. You only need to manage one policy. With GEICO’s Rideshare Insurance, you can drive for Uber, Lyft, and other rideshare companies. You are not limited to one company, and you can drive for several. GEICO does not offer add-on rideshare policies or extensions. You must buy GEICO Rideshare Insurance to replace your personal policy.
Allstate (Starting at $40 Per Year): Allstate offers its Ride For Hire auto insurance to Uber and Lyft drivers. Priced as little as pennies per day, Allstate’s Ride For Hire covers gaps in your current auto insurance coverage. You can use Allstate’s Ride For Hire to cover you when driving for Uber, Lyft, and other personal transportation network companies (TNCs).
State Farm (Starting at $7.50 Per Month): State Farm offers competitively-priced insurance for rideshare drivers. You buy it as an add-on to your current policy. It covers gaps left in Uber and Lyft’s auto insurance (or any other TNC you drive for). State Farm’s rideshare coverage adds about 15% to 20% to your current auto insurance premium. If your current premium is around $600 per year, then rideshare insurance will add $90 to $120 to your premiums.
USAA (Starting at $5 Per Month): USAA offers rideshare gap coverage in 43 states. You can add USAA’s rideshare insurance to your existing USAA auto policy for added protection. USAA’s rideshare gap coverage covers you when driving for rideshare companies and when temporarily delivering items for work.
Erie Insurance (Priced at $9 to $15 Per Month): Erie’s rideshare insurance covers you during every part of your trip when driving for a rideshare company, including before, during, and after the hired ride. Erie adds a business use designation to your personal care insurance policy. Priced at $9 to $15 per month, this business use designation covers you when driving for rideshare companies or when driving for any work-related reasons.
Mercury (Starting at $0.90 Per Day): Mercury offers rideshare insurance for Uber, Lyft, and other TNCs. Like other policies listed here, Mercury’s rideshare insurance limits risks and fills in gaps. Mercury’s rideshare insurance can help fill liability gaps and provide you with premium insurance, giving you excess coverage when the TNC’s insurance does not apply.
Safeco (Starting at $15 Per Month): Safeco recently introduced rideshare insurance through the Safeco Auto Ridesharing Coverage system. Initially only available in Colorado, Illinois, and Indiana, the coverage is now available in most Safeco states.
Esurance (Starting at $15 Per Month): Esurance, an Allstate subsidiary, offers rideshare insurance in California, Illinois, and New Jersey through its ShareSmart program. Esurance plans to expand this coverage to other states soon. ShareSmart fills in gaps in coverage while letting you pay the lowest comprehensive and collision deductible possible (based on whichever is lower, your collision or rideshare coverage deductible).
Progressive (Priced at $9 to $20 Per Month): Progressive’s rideshare insurance lets you manage one policy and one payment while seamlessly adding rideshare coverage to your plan. Just add Progressive’s rideshare coverage to your personal auto policy, and you can get covered as soon as you start working for Uber, Lyft, or any other TNC.
Liberty Mutual (Unavailable Unless Buying Directly Through Uber or Lyft): Liberty Mutual is the only one of the top 10 largest insurance companies in the United States that does not offer rideshare insurance directly to policyholders. However, Liberty Mutual has partnered with Lyft and Uber as an official insurance provider in certain states. When you get insurance through Uber or Lyft, you may be getting a Liberty Mutual policy.
Farmers (Priced at $8 to $25 Per Month): Farmers offers rideshare insurance that fills in gaps in coverage. With Farmers Rideshare, you can extend your personal auto insurance policy to cover the gaps left in Uber, Lyft, and other TNC companies’ coverages. Farmers lets you add Farmers Rideshare to your policy as an add-on, supplementing your personal coverage.
Nationwide (Pay Per Use): Nationwide is the only major auto insurance company in the United States that offers pay-per-use rideshare insurance. While other insurers charge $5 to $30 per month for rideshare insurance, Nationwide rolled outs its pay-per-use rideshare coverage in 2020. You pay a monthly premium based on the number of driving hours you log. As of 2021, Nationwide has been slow to roll out this program to most policyholders, but it could become available in your area soon.
American Family ($7 to $20 Per Month): American Family offers rideshare insurance that covers the gap in existing coverage. It’s an endorsement, which means you can easily add it to your personal policy.
Travelers ($10 to $25 Per Month): Travelers offers rideshare coverage in Colorado and Illinois. Policyholders can add the rideshare endorsement to their policy as easily as they would add any endorsement. The coverage starts when you turn on your ridesharing app, then ends when you connect with a passenger, filling in the gaps left in your ridesharing company’s coverage.
Uber and Lyft Cover Rideshare Drivers, But Only at Certain Times
Uber and Lyft both provide ridesharing insurance for drivers – but there’s a catch. They only provide insurance during “Period 2” and “Period 3”:
Period 2: Period 2 begins when you accept a ride request and begin driving toward the passenger who requested the ride.
Period 3: Period 3 begins when the passenger gets into your vehicle and ends when they exit your vehicle.
That means you’re not covered when you’re online and waiting for a request (i.e. when you’re in Period 1). During Period 1, you have no collision coverage from Uber or Lyft. You will have liability coverage (the bare minimum required to legally drive on the road), but Uber and Lyft significantly lower liability coverage during Period 1.
Uber and Lyft’s plans also have surprisingly high deductibles. If you get into a collision during Period 2 or Period 3, for example, you’ll be covered, but you’ll have to pay a high deductible to make a claim. Uber has a $1,000 deductible, for example, while Lyft has a $2,500 deductible.
It’s also important to note that you need to be running the app to receive coverage. If you’re not running the app, then you immediately lose all coverage from Uber or Lyft.
Ultimately, Uber and Lyft provide basic ridesharing insurance. However, both Uber and Lyft’s insurance options leave significant gaps in coverage. These gaps can be covered with ridesharing insurance available from traditional car insurance companies.
Most Major Insurance Companies Now Provide Ride-Sharing Insurance as an Option
The important thing to recognize here is that your insurance company can provide complete coverage while you’re driving for Uber or Lyft – but your existing policy probably doesn’t provide ridesharing coverage by default.
Uber and Lyft have exploded with growth across the United States. There are hundreds of thousands of drivers across the country. Insurance companies know they need to offer ride-sharing policies to compete – and that’s why all major insurance companies now offer ride-sharing policies.
Typically, ridesharing insurance will cost slightly more than ordinary insurance. When you get ridesharing insurance, your car will be protected despite the fact you use it for professional services.
There’s a catch: rideshare insurance isn’t yet available in all 50 states. It’s now available in most states and from most insurers – and the number is growing every month. However, your state might not have rideshare insurance.
Call your Insurance Company or Compare Quotes Online to Get the Best Uber or Lyft Insurance
If you’re currently insured, and you’re happy with your coverage, then contact your car insurance company. Ask about ridesharing policy options. Adding ridesharing insurance to your policy might be cheap and hassle-free.
Alternatively, not all insurance companies offer ridesharing insurance. You may need to switch insurance companies to ensure you stay covered. Make sure you compare quotes online to get the best ridesharing car insurance for your unique needs.
Final Word on Insurance for Uber and Lyft
Uber and Lyft both provide basic insurance to drivers. However, that insurance is only active when you’re driving to pick up a passenger or have a passenger in the vehicle. If you’re waiting for a ride while the app is active, then you only have liability coverage. If you’re driving with the app offline, then you have no coverage whatsoever from Uber or Lyft.
Meanwhile, your existing car insurance policy will provide coverage at all times when not using the app – but standard car insurance policies don’t cover you while you work for ridesharing companies like Uber or Lyft. However, they do provide optional ridesharing policies that can be added to your plan.
Talk to your insurance company today to explore your ridesharing policy options. The vast majority of drivers will want to add a ridesharing policy to ensure complete coverage.