Do I need special insurance to drive for Uber or Lyft? (2024)

Why do rideshare or delivery drivers need special insurance?

If your job requires you to drive your own vehicle or work part-time as an Uber or Lyft driver, you need a special insurance policy. Typically, an endorsem*nt to your regular auto insurance provides coverage for you while you’re using your vehicle for work-related purposes.

Some people think that simply not telling their insurance company means they won’t be able to charge them the extra premium and that they will pay the loss. Don’t kid yourself. Simply not telling your insurance company does not mean they will cover you when a loss occurs using the vehicle. In fact, when it comes to insurance, it is a black and white coverage decision. Either there is coverage, or there isn’t.

When deciding what coverage you need, ask yourself these questions:

1. Who owns the vehicle you’re using for delivery? If the company owns it, they probably have a commercial policy. If you own it, you need to carry the right insurance.
2. How are you using this vehicle? If you use your car for business purposes such as delivery or ridesharing, you need a commercial insurance policy or a rideshre endorsem*nt.

If you consider driving for companies such as Uber, Lyft, DoorDash, Grubhub, Postmates, Uber Eats, Instacart, or other delivery-type companies, you want a rideshare insurance endorsem*nt.

Many variables come into play when an insurance company determines the premium. Some of those are:

• Garaging Zip Code
• Driving history
• Credit report
• Loss history
• Education level
• Type of vehicle
• Personal or commercial use

Keep in mind, not all rideshare endorsem*nts are equal. Depending on the insurance carrier, some services are covered, and some are not. For example, just because a rideshare endorsem*nt covers Uber or Lyft, it may not cover driving for Shipt or Instacart. Before signing up to drive for a new service, be sure to contact your local insurance agent to find out if you are properly covered.

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Acommercial auto insurance policyis needed for:

• Cargo delivery: A very complex insurance depending on the cargo, commodity, and company a truck or freight delivery system.

• Food delivery services: Companies or individuals that deliver food (such as entrees, drinks, groceries, or meal kits) to a paying customer.

• Courier delivery services: A service that delivers individual, bulk, or heavy parcels between two parties.

• Ridesharing: Individuals who use their own vehicle to transport people from point A to point B in exchange for money.

Ridesharing F.A.Q.’s

A rideshare insurance policy provides coverage during:

• Waiting for a ride request.
• When you accept a ride request and are on the way to pick up the rider.
• When you pick up the rider & drive to the destination.

In what situations does my personal auto insurance cover me?

• When you are offline or not using the Uber/Lyft app.
• The period after you’ve dropped off a passenger but are still logged in and are waiting to match with another passenger (for instance, you roll forward and hit another vehicle with no rider in your car).

Does Uber or Lyft or any other rideshare company provide insurance for you?

Uber maintains insurance on your behalf, such as third party liability, uninsured/underinsured motorist bodily injury, and contingent comprehensive and collision coverage.

However, your current auto insurance policy may offer a rideshare endorsem*nt that can be added to your policy. You may receive additional coverage too that goes above and beyond the limits provided by the Rideshare company. Talk to one of our agents first. We’ll explain the difference in coverage options.

What if I don’t have rideshare insurance & I’m involved in an accident?

The consequences of not having a rideshare insurance endorsem*nt could result in a denial of coverage by your main auto insurance company. Whether you fail to tell them you are using your car for rideshare services or simply didn’t know you needed the insurance endorsem*nt on your main auto policy, could leave you liable for the entire loss. This leaves you with paying for injuries, medical bills, car repairs, property damage, etc. if you get into an accident.

If you are considering a career or part-time job for any rideshare company, reach out to our agency! Rules and regulations change regularly, so be sure to research yourself what changes may have occurred since this article was written. We can go over many coverage options with you to ensure you have the right insurance protection. Getting the right policy is easy, we just need to know that you’re driving for a Rideshare company and we can get you the right policy.

What about car rental services like Turo?

The rideshare and rental industry is constantly expanding. Some new services offer car owners to rent their vehicle without also being the driver. Your standard auto insurance policy will not cover any damage or claims during a rental for these types of services. This is considered a commercial use for the vehicle and requires a commercial auto policy.

Most of these services provide an insurance policy (at a cost) to owners choosing to rent their vehicle to strangers through an app. However, please keep some points in mind.

1. Thoroughly read and understand the insurance policy from the service. You will want to know exactly what is covered before a claim happens. More than likely, your personal auto insurance will not offer any additional protection, so be sure you know what is offered through the service.
2. Look for details about expanded protection, such as personal injury protection and uninsured motorists. Having insurance is not just for the driver but also for anyone else who may use the car in a rental situation or other drivers on the road. If an uninsured or under-insured motorist hits your car during a rental and people are injured, how protected are you?
3. Understand the service. Are you personally comfortable with the rules they have?

Offering your car through a rental service could be an easy way to make some extra money. However, before you get started, make sure you know the service inside and out.