How Does Rideshare Insurance Work?

How Does Rideshare Insurance Work?

If you are driving for Uber or another ridesharing service, purchasing rideshare insurance is imperative. This insurance covers you in the “gap” periods not covered by the service’s insurance.   

Keep in mind that should your insurance carrier find out you are driving for a rideshare service and do not have this special insurance coverage, expect cancellation of your policy.  

A motorist can get into an accident as easily when driving for a rideshare service as when driving for personal business. In fact, it is more likely, as passengers may cause distractions and the driver may not prove familiar with the roads. A Los Angeles Uber accident attorney at Ellis Injury Law protects your rights while helping you receive the compensation you deserve for your injuries.  

Rideshare insurance availability 

Many major insurance companies now offer rideshare insurance, but it is not available everywhere. While Uber, Lyft and other ridesharing companies may offer their own version of this coverage, it is often inadequate, as it does not cover drivers while they wait for a rider match. Rideshare insurance provided by standard insurers is added to the driver’s personal car insurance policy.  

Rideshare insurance phases 

Rideshare insurance coverage breaks down into phases while you are working. In phase zero, you are not working, the app is off, and your personal car insurance is covering you. In phase 1, the app if on, and you are waiting for the next ride request. Your personal policy does not cover you, and Uber insurance will only cover liability, not comprehensive and collision or uninsured motorist incidents. You need rideshare insurance for this gap period. 

During phase 2, you’ve accepted a ride request and are on your way to meet your passengers. If you have rideshare insurance, you are fully covered. Once passengers enter the vehicle in phase 3, you are covered by Uber or another service’s policy.  

Rideshare insurance costs 

The good news is that rideshare insurance is relatively cheap, although much depends on the insurer. Many drivers find that adding rideshare insurance to their automobile policy costs about $15 per month, although even less expensive rates are available. Some insurance companies state that adding rideshare coverage will increase annual premiums between 15 and 20 percent. On the other hand, one major insurance company offers rideshare insurance for just $15 to $20 per year.  

Unfortunately, the alternative to a rideshare insurance policy, if there is no coverage in your area, is commercial insurance and that is costly. Expect to pay an extra $1,200 to $1,400 annually for commercial coverage, albeit with higher liability limits. If you are tempted to not purchase such insurance, remember that no one can predict when an accident will happen and if your personal car insurance carrier finds out you were driving in that gap period your coverage is dropped. Some rideshare services may cover drivers even during the gap period, but your personal insurance carrier will likely drop you even under these circumstances if you have not informed them you are working as a rideshare driver.  

In a few states, having commercial driving insurance is not sufficient if you do not have a commercial driver’s license.  

Rideshare insurance is not standalone coverage 

Rideshare insurance is not the kind of coverage you can purchase separately from different auto insurers. You must either purchase it and add it on to your current insurance policy, or buy a hybrid policy including ridesharing. It is not “standalone” coverage.  

When seeking a rideshare policy, first tell your insurance provider that you plan to drive for a rideshare service. Then, you and your agent can determine the amount of coverage necessary. When passengers are in the car, both Uber and Lyft cover the driver for $1 million in liability insurance. What you want to know is how much coverage you need for those gap periods.  

Contact a Los Angeles Car Accident Lawyer 

If you or a loved one were injured while driving for Uber or another rideshare service, contact an experienced Uber accident attorney at Ellis Injury Law. Fill out our online contact form or call or text us today to arrange a free consultation. We will review the circumstances of your case and advise you regarding options. Our dedicated attorneys have recovered more than $350 million for clients in settlements and verdicts. There is no fee unless we win.