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Did you know that if you’re a rideshare driver and your personal car is damaged while giving a ride, your personal auto insurance might not cover the cost? Or that the same is true if you cause an accident while driving for Uber or Lyft? Carpooling with others to save on gas and other expenses is a great way to get from point A to point B. However, if you’re an Uber or Lyft driver, there are some important risks to be aware of. Unless you have rideshare car insurance, as a rideshare driver your personal auto insurance policy may not cover you in case of accidents or damage to your vehicle. Luckily, there are several options for rideshare drivers. We’ll explain what rideshare car insurance is, why it’s important for drivers like you, and how it differs from standard personal auto coverage.
Rideshare Insurance: What It Is, And Why You Need It
Did you know that if you’re a rideshare driver and your personal car is damaged while giving a ride, your personal car insurance might not cover the cost? Or that the same is true if you cause an accident while driving for a rideshare company? Carpooling with others to save on gas and other expenses is a great way to get from point A to point B. However, if you’re an Uber or Lyft driver, there are some important risks to be aware of. Unless you have rideshare insurance, as a rideshare driver your personal auto insurance policy may not cover you in case of accidents or damage to your vehicle. Luckily, there are several options for rideshare app drivers. We’ll explain what rideshare insurance is, why it’s important for drivers like you, and how it differs from standard personal auto coverage.
What Is Rideshare Insurance?
Rideshare insurance is a type of supplemental policy that covers your car, your passengers, and any other people or property involved in an accident while you’re driving for Uber or Lyft. This ride-hailing insurance endorsement may help fill gaps between your personal automobile insurance policy and the commercial policy of a ridesharing company (referred to as a transportation network company or TNC). If you drive for a TNC, this endorsement may be helpful.
You may choose to get a full ridesharing insurance policy, which combines both personal and business coverage into one auto policy. This hybrid policy can provide comprehensive protection for rideshare drivers, ensuring they have the necessary rideshare auto insurance.
Rideshare policies typically cover the following:
– Liability: Rideshare insurance usually covers your liability to cover the cost of damage and injuries sustained by others as a result of your car accident – including passengers in your car at the time of the accident. Liability coverage is required by law in every state (with some exceptions which vary by state).
– Medical expenses: Rideshare insurance should also cover your passengers’ medical expenses if they are hurt in your car.
– Rideshare vehicle damage: Rideshare insurance should also cover your car if it is damaged because of an accident while driving for Uber or Lyft. Comprehensive coverage can be a part of this rideshare auto insurance protection.
Why Does Rideshare Insurance Matter?
A common question that we see is do I need rideshare insurance. Unlike standard personal auto coverage, which kicks in automatically when you get into a car accident, rideshare insurance is something you need to actively purchase and add to your policy. Your personal auto coverage, which is provided by your own car insurance policy, may not cover you as a rideshare driver. Another common question is what does rideshare insurance cover. Rideshare insurance fills the gap between what your personal auto insurance policy covers and what you need to be covered as a rideshare driver. Keep in mind that car insurance companies are very clear that they don’t offer rideshare insurance policies. Instead, they sell supplemental policies that go on top of your existing auto insurance to cover you as a rideshare driver. They are not the same thing – although many people use the terms interchangeably.
The National Association of Insurance Commissioners (NAIC) says that the major transportation network companies provide limited commercial insurance for their drivers using their vehicles for TNC business. Business use may include instances when the driver is en route to pick up a passenger or has a passenger in the vehicle.
However, the NAIC says that personal automobile insurance generally does not cover business use, so the driver might not be covered by either policy if he has not yet accepted a ride request and is available for hire. A ridesharing endorsement might help fill that coverage gap. Certain coverages on your policy will be extended so that they apply during the ‘app on’ period as you’re waiting for a ride request.
How Does Rideshare Insurance Differ From Standard Auto Coverage?
When you’re an Uber or Lyft driver, you should have three types of coverage on your car: liability, collision, and comprehensive. Standard personal auto coverage includes liability, collision, and comprehensive. But the coverage amount is based on your car, your driving record, and the number of passengers in your car at the time of the accident. If you add rideshare insurance, however, you are provided specific coverage limits for a certain set of circumstances and passengers.
Ridesharing endorsements may also help you reduce your out-of-pocket costs when paying for a TNC’s high deductible insurance policy. Although some TNCs provide commercial insurance for drivers, if you are injured while working for the company, you will most likely have to pay the policy’s deductible. This is where rideshare insurance with deductible gap coverage can be beneficial.
In this situation, a ridesharing insurance endorsement may help bridge the gap between your personal auto policy’s deductible and the TNC’s deductible. If your collision coverage deductible is $500 and the TNC’s is $1,000, for example, the ridesharing endorsement may cover the $500 difference, effectively acting as deductible gap coverage.
How Much Does Rideshare Insurance Cost?
Like standard car insurance, rideshare insurance in Illinois is a financial product that is priced based on a number of factors, including your car and driving record, where you live, and the level of coverage you choose. Unlike standard car insurance, however, there’s no standard or average price for rideshare car insurance. Rideshare insurance companies offer policies with different coverage amounts, deductibles, and price tags. You’ll want to shop around, explore your options and find a policy that fits your needs while remaining within your budget. Understanding your insurance limits is crucial in this process.
Keep in mind that if you purchase a rideshare endorsement for your car insurance
With a rideshare insurance policy, you will most likely have the same coverage limit as you do for your own policy. In other words, if your regular policy has a $100,000 liability insurance limit, your policy would also cover up to $100,000 in covered rideshare insurance quotes. If you purchase a separate rideshare service policy, you may need to set specific insurance limits.
Get Rideshare Insurance with Magnum Insurance
If you’re an Uber or Lyft driver, it’s essential to make sure you have the right kind of coverage on your car. Our trained and certified local agents at Magnum Insurance are ready to help you navigate this conversation and select the best rideshare insurance coverage that fits your needs and budget. We specialize in car insurance for rideshare drivers, including insurance for Uber drivers.
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