How do I get cheap ride share insurance?
A note about the pandemic: Amid the COVID-19 pandemic, many insurance companies are extending coverage to automatically include a driver’s personal vehicle when they are delivering food, medicine and other essentials for a delivery company. For more information, see NerdWallet’s coronavirus and car insurance guide.
Insurance for Uber and Lyft drivers — on top of those companies’ coverage — is the best way to be fully covered on the job. Often called rideshare insurance, these hybrid policies include coverage for personal auto use and for the times drivers are signed in to a ridesharing app but not covered by Lyft’s or Uber’s insurance.
Drivers for on-demand delivery companies like Grubhub, Instacart and Uber Eats also need rideshare insurance to avoid a coverage gap.
Why delivery, Uber and Lyft drivers need rideshare insurance
You need rideshare insurance in any situation where you drive your car to earn money, whether you drive for ridesharing companies like Uber or Lyft, or an app-based delivery service.
Not only is your personal auto insurer unlikely to cover any accidents that happen during your ridesharing gig, but it could even cancel your policy if it finds out you haven’t disclosed you drive the car for money. Even if you have coverage from the company you rideshare for, it likely won’t apply the entire time you’re on the job.
Rideshare insurance isn’t available everywhere. If you can’t get it, you would need a commercial insurance policy to be fully insured and avoid being dropped by your carrier. These plans have higher liability limits than typical policies — and higher prices to match. According to insurance agent group Trusted Choice, the average commercial policy for a passenger car costs from $1,200 to $2,400 a year or more.
Lyft and Uber Insurance
Uber insurance or Lyft insurance provides minimal coverage while you have the app on and are waiting for a request — known as Period 1. Fuller coverage kicks in once you’ve accepted a ride and are carrying passengers.
Here’s how the rideshare insurance periods (sometimes called “phases”) work:
Period 0: App is off. Your personal policy covers you.
Period 1: App is on; you’re waiting for a ride request. Personal auto insurance without ridesharing coverage doesn’t cover you. Your rideshare employer’s policy is limited to liability coverage.
Period 2: Request accepted, and you’re en route to pick up a passenger. Your Uber or Lyft insurance policy is in full force.
Period 3: You have passengers in the car. Your Uber or Lyft insurance policy is in full force.
Lyft insurance and Uber insurance are almost identical. However, the deductible amounts for comprehensive and collision insurance are different. A deductible is your share of repair costs before your insurer pays the rest of a claim. Lyft’s deductible is $2,500, while Uber’s is $1,000.
Lyft and Uber insurance by period
Rideshare insurance for delivery app drivers
If you’re driving for an on-demand delivery service that does offer car insurance, check its policy carefully — coverage differs from company to company and is limited in all cases.
For example, Grubhub and Instacart don’t provide any car insurance, but you’ll need your own coverage to drive for them. Meanwhile, DoorDash offers only liability insurance while the food you’re delivering is in your car.
As with a rideshare company, the insurance your delivery app provides will depend on the period you’re in:
Period 0: App is off. Your personal policy covers you.
Period 1: App is on; you’re waiting for a request. A personal policy without ridesharing coverage doesn’t cover you. Some delivery app companies offer coverage.
Period 2: Request accepted, and you’re en route to pick up a delivery. Some delivery app companies offer coverage.
Period 3: You have the food or goods in the car. Your employer’s policy is in full force.
Here’s a breakdown of the car insurance offered by some on-demand delivery companies:
Rideshare insurance offered by delivery app companies
You can get rideshare insurance from many of the largest auto insurers in the country, including Geico, Farmers and Progressive. But rideshare insurance isn’t available everywhere.
How much rideshare insurance costs
A policy with ridesharing coverage costs around $15 more a month, according to insurers’ websites, although some say it’s much cheaper. For example, Allstate says coverage can be as cheap as around $20 per year. State Farm, on the other hand, says its rideshare insurance typically costs 15%-20% more than a personal auto policy without rideshare coverage.
Not all insurers share estimated rates, but here’s a snapshot of some that do.
Rideshare insurance costs by company
How to buy rideshare insurance
Rideshare insurance is either a hybrid policy or an add-on from your personal auto insurer, not stand-alone coverage. For example, you can’t have Progressive for your personal auto policy and buy rideshare insurance from Geico.
When selecting rideshare insurance, be sure to:
Tell your personal auto insurer you’re driving for a ridesharing company.
Figure out the gaps between your personal policy and your rideshare company’s policy. Uber and Lyft both provide $1 million in liability coverage for drivers carrying passengers. Among smaller and newer companies, policies can vary.
Ask your current insurer whether it offers rideshare insurance to fill in coverage gaps, or to quote you a commercial policy. If both types are available, get both quotes so you can compare costs.
What happens if you have an accident while driving for Uber, Lyft or other app?
If you cause an accident during Periods 2 or 3 — while you’re carrying passengers or on your way to a fare — the insurance policies for Postmates, Uber Eats, Uber and Lyft will cover medical expenses and other damages you cause up to $1 million. The $1 million limit is much higher than most drivers — even taxi drivers in many major cities — carry in liability coverage.
If an uninsured or underinsured driver hits you while driving for Lyft or Uber, the amount its policy covers varies by state. No delivery company offers coverage for this situation.
You can also draw on comprehensive and collision coverage from ridesharing companies and Uber Eats, but only if you also have such coverage on your personal policy. Beware, though: Deductibles can be high, and the policies apply only once you’ve accepted a request or while you’re carrying passengers or food.
If you cause an accident during Period 1, you’ll need to file a claim with your insurance provider unless your state law or rideshare insurance policy specifies otherwise. If the claim is denied or you’re not fully reimbursed, Lyft’s or Uber’s insurance (for both Uber and Uber Eats drivers) should cover the rest. But ridesharing companies’ limits in these cases are relatively low — this is the “gap” that rideshare insurance from your personal carrier is designed to cover.
How to report an accident and file a claim
Call the police. Whether or not you’re in rideshare mode when a car accident happens, your first step should be to call the police. Depending on the type of accident and your rideshare company’s rules, you might have to provide your personal proof of insurance or the rideshare company’s certificate. Exchange information with the other driver as you normally would.
How to file. Next, inform your personal auto insurer. Even if you can rely on your employer to cover the damage, your personal insurer will find out about any accidents, and it’s best they hear it from you. Drivers who haven’t been honest about their driving status can find themselves in a tough situation: If you choose not to tell your insurer, you risk being dropped.
Finally, notify your ridesharing company or delivery app employer. If you can take advantage of the company’s coverage, a representative can help you start the claims process.
Rideshare insurance: Key takeaways
Read more: Compare car insurance rates