Driving For Uber Or Lyft? Make Sure Your Insurance Covers It

Rideshare driving can be a flexible way to earn extra income, but there is a catch many new drivers miss: your personal car insurance may not cover you while you are working. Personal policies are built for personal use, and most include an exclusion for driving for hire.

That does not mean you are on your own. Uber and Lyft provide some coverage, and you can fill the rest with the right policy. Here is how it fits together.

The Three Periods Of A Rideshare Trip

Rideshare coverage is usually described in three periods. In period one, the app is on and you are waiting for a request. In period two, you have accepted a ride and are on your way to the passenger. In period three, the passenger is in the car.

Most of the confusion is in period one. Several consumer sources explain that the rideshare company’s coverage is often limited or liability-only during this stage, while your personal insurer may deny a claim because of the for-hire exclusion. That is the famous coverage gap.

Get a free quote

Get Free Insurance

Quote online Now!

Quick
Easy
No Obligation

Compare quotes and see how much you could save.

Your privacy and security are important.

Ways To Close The Gap

Rideshare endorsement
An add-on to your personal policy that extends coverage into the waiting period.
Hybrid or commercial policy
Some insurers offer policies built for drivers who work for ridesharing services.
Check your state rules
Some states, such as California, set minimum coverage for the waiting period.
Tell your insurer
Never hide rideshare use. It can lead to denied claims or cancellation.

What Does An Endorsement Cost?

Prices differ by insurer and state. One driver-focused site estimates that a rideshare endorsement typically adds around $15 to $30 a month to a personal premium. By comparison, a full commercial policy can cost far more. Ask for a quote before deciding, and see exactly which periods the endorsement covers, since some only cover period one.

Collision And Comprehensive Need Your Own Coverage

Rideshare companies may offer contingent damage coverage for your car during certain periods, but it generally depends on you carrying collision and comprehensive on your own policy, and it can come with a high deductible. Check the current terms for the company you drive for.

Questions To Ask Your Insurer

Do you offer a rideshare endorsement in my state?
Which periods does it cover?
Will my existing coverage limits apply while the app is on?
Could my policy be cancelled if I drive for a rideshare company?
How does it work together with the rideshare company’s insurance?

Frequently Asked Questions

Do delivery drivers need the same cover?

Delivery work can also count as business use. Ask your insurer how food and package delivery are treated.

What if I only drive occasionally?

The exclusion applies whenever the app is on, even for a short time, so occasional drivers should still check their cover.

Rules differ by state and by company, and they change. Always confirm the current details with your insurer and the rideshare company.