If you drive for a rideshare company like Uber or Lyft, it’s important to understand how your auto insurance could be affected. Using your car for ridesharing requires additional coverage in the form of rideshare insurance to ensure you’re financially protected while driving. Neither your personal auto insurance policy nor the insurance provided by the rideshare company will offer consistent protection while you’re driving for one of these companies. To help rideshare drivers understand what’s required and what’s available, Bankrate’s insurance editorial team created a guide to rideshare insurance.
What is rideshare insurance?
Rideshare insurance is a type of auto insurance endorsement that exists to cover the gap between a personal auto insurance policy — which typically excludes rideshare driving — and the commercial auto insurance policy provided by rideshare companies like Uber and Lyft. Driving for a rideshare company without your own rideshare coverage could leave you uninsured during certain parts of your shift.
Specifically, rideshare insurance addresses the period when a rideshare driver is waiting to accept passengers but doesn’t have a client in the vehicle. In most cases, neither a personal auto policy without rideshare coverage nor the rideshare company’s commercial insurance will cover accidents during this timeframe.
Why Uber and Lyft drivers need rideshare insurance
Unlike a standard personal auto policy, rideshare insurance isn’t legally required in most states. However, if you get into an accident while working for a ridesharing app, having this type of coverage on your policy could save you significant financial risk.
While plans may vary, most employer-provided insurance policies do not cover a rideshare driver throughout the entirety of their trip. Typically, these commercial insurance policies only cover you while you are picking up or dropping off a customer. Rideshare workers know that at least some of their time will be spent waiting for a job to be available or moving from location to location to be available for potential rides in their area. Ridesharing services like Uber and Lyft typically divide coverage periods into the following categories:
- Offline: When you’re not logged in to your rideshare driver app, or you’re using your vehicle for personal use, you are not covered by commercial car insurance provided by Uber or Lyft. Instead, offline driving is typically covered by your personal car insurance policy.
- Period 1: Waiting for request: If you’re logged in for work with your rideshare company, but you have not been assigned a customer yet, you may be ineligible for employer-provided coverage. Since you’re technically on the job during this time, your personal insurance is also unlikely to cover you. This leaves a gap in your insurance coverage, leaving you and your vehicle financially vulnerable should an incident occur.
- Period 2: On the way to pick up a customer: Your commercial insurance kicks in once you accept a customer and start driving to pick them up. However, even though you are covered during this period, rideshare companies tend only to provide limited liability insurance. Both Uber driver insurance and Lyft driver insurance provide bodily injury liability coverage of $50,000 per person, bodily injury liability coverage of $100,000 per incident and $25,000 for property damage coverage.
- Period 3: Ride in progress: You are typically covered by your commercial auto policy after you pick up the customer and for the duration of the ride. Upon dropping off your customer, you return to period one status, where you most likely do not qualify for either your personal insurance coverage or your employer-provided coverage.
| Car insurance provided by rideshare company | Personal auto insurance policy | Rideshare insurance purchased by rideshare driver |
|---|---|---|
| Only applies to specific times during the rideshare | Only applies when rideshare driver is not using the car for any work-related purpose; does not cover drivers logged into rideshare app waiting for a request | Covers the periods not covered by personal car insurance or employer-provided car insurance, including waiting for request period |
| Company dictates coverage level | You pay for the amount of coverage you need | You pay for the amount of coverage you need |
One more crucial reason you may need rideshare insurance is to protect yourself from dropped claims or policies if your insurer finds out you’ve been driving for a rideshare company without disclosing it to them. Your personal auto insurance policy is written based on risk, and ridesharing introduces new risks; not telling your insurer or obtaining appropriate coverage could put you at further risk.
One more crucial reason you may need rideshare insurance is to protect yourself from dropped claims or policies if your insurer finds out you’ve been driving for a rideshare company without disclosing it to them. Your personal auto insurance policy is written based on risk, and ridesharing introduces new risks; not telling your insurer or obtaining appropriate coverage could put you at further risk.
The top rideshare insurance companies
Because ridesharing has become such a popular option for gig-based work, with nearly two million rideshare drivers on the road across the country, most major insurance companies offer either a rideshare endorsement or a standalone rideshare insurance policy to cover drivers while they work.
However, rideshare insurance availability can vary significantly from state to state. If you live in a state where rideshare insurance coverage is unavailable, you may want to look into purchasing your own commercial insurance policy to keep yourself financially protected. A licensed insurance agent can help you investigate your options.
Below, Bankrate’s insurance experts reviewed our picks for the top car insurance carriers for rideshare coverage. While we do not have average premium data specifically for rideshare coverage, we have shared each company’s average annual cost for full coverage car insurance to give you a starting point if you are shopping for a new policy with a company that also offers rideshare coverage. Keep in mind that cost will vary as insurance costs are dictated by many factors, including location and details specific to each driver such as driving history and vehicle make and model.
How much is rideshare insurance?
Determining an average price for rideshare insurance is difficult because the cost varies by state and company. Additionally, any car insurance premium is affected by rate factors such as driving history, geographic location, claims history, car age and more. Consider contacting companies that offer rideshare insurance near you to get a quote to determine your actual rates.
How to buy rideshare insurance
Some car insurance companies allow you to add rideshare insurance to your policy through their websites or online portals. Others, like Farmers, require you to call and speak to an agent. You may want to call an agent even if it’s not required since the availability and coverage options for rideshare insurance can be complex and may vary even within your state.
When discussing coverage options with your insurer, be sure to tell them you are working as a rideshare driver. They’ll give you a personalized quote based on your location, personal information and driving history. It’s generally a good idea to request and compare quotes from multiple providers for the same coverage types and levels to determine which company can give you the best rate for your needs.
Frequently asked questions
Methodology
Bankrate utilizes Quadrant Information Services to analyze October 2024 rates for all ZIP codes and carriers in all 50 states and Washington, D.C. Rates are weighted based on the population density in each geographic region. Quoted rates are based on a single, 40-year-old male and female driver with a clean driving record, good credit and the following full coverage limits:
- $100,000 bodily injury liability per person
- $300,000 bodily injury liability per accident
- $50,000 property damage liability per accident
- $100,000 uninsured motorist bodily injury per person
- $300,000 uninsured motorist bodily injury per accident
- $500 collision deductible
- $500 comprehensive deductible
To determine minimum coverage limits, Bankrate used minimum coverage that meets each state’s requirements. Our base profile drivers own a 2022 Toyota Camry, commute five days a week and drive 12,000 miles annually.
These are sample rates and should only be used for comparative purposes.
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