Uber Lyft Finding Rideshare Insurance Personal Insurance

Uber and Lyft: Finding Adequate Rideshare Insurance


Ridesharing services are a big thing these days. It seems as though everyone either uses or knows someone using car services like Uber or Lyft. What drivers and passengers might not know is that rideshare insurance is a serious issue to be considered.

Luckily for those doing the driving, insurance companies have finally started catching up to the need for it. This is also good news for those hitching a ride, who may not realize their drivers could be operating with a gap in insurance coverage. (Yes, it could potentially impact you.)

Why Drivers Need Rideshare Insurance

Let’s say that you decide one day to start making extra money and sign up for Uber as a driver. You’ve heard all about it and seen the commercials, and you’re taking the plunge. A little extra cash from your “side hustle” never hurt anyone.

One of the last things anyone considers when making a life choice is insurance. I’ve been an insurance agent; trust me, I know. Nobody ever asks themselves “I wonder what my agent would say about this.” That’s a natural reaction, but unfortunately, you’ve got a potential gap in coverage on your hands.

Assuming that you have personal car insurance, here it is: your unendorsed policy provides no coverage for what you are about to do in certain situations. Most personal auto policies exclude coverage when carrying passengers for a fee. This is considered livery, which is a business pursuit.

Your ridesharing service of choice, like Uber, will offer you coverage while you are transporting a rider. The personal auto policy will not. But what happens if Uber is open on your phone, but you have no passengers? Uber only covers you when someone else is in the car. Your personal auto only covers you if you’re not actively seeking a livery transaction (as in, the app is closed). There’s the gap.

Rideshare Insurance Gap

Rideshare Insurance: Industry Changes

If this article were written a year ago, the numbers would have been thinner. Now, many carriers are on top of the need for rideshare insurance and filling those coverage gaps. Whether USAA, Geico, Allstate, Farmers, or a handful of agency business companies, like MAPFRE, rideshare policies and endorsements exist.

There are amendments available for some personal auto policies that seek to fill in that gap. Coverage is no more expansive than extending insurance during that time when the driver has the app open but has no riders. Some coverage forms consider this to be a “standby period.”

Other companies, like Geico, have rolled out policies that go further, with the intent of providing an alternative to the app-offered coverage. They call it a “hybrid policy” that covers the business venture, fills in the gap between rides, and also serves as a typical personal auto policy.

Be Mindful of Your Rideshare Insurance Needs

If you’re an Uber, Lyft, or any other ridesharing service driver, the coverage gap is real. You should notify your insurance agent or company that you are a driver and see what they suggest for additional coverage. Be sure to ask questions and make sure that you have all cracks in coverage filled.

It would also be a good opportunity to verify that you have coverage through your rideshare service. If not, policies like Geico’s “hybrid” or even a business auto policy could potentially fill the need. Like we say all the time, and in our disclaimer page, check with your insurance broker or agent about your specific options for coverage.

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