First there was Uber, then Lyft and now there are any number of ridesharing services. Whether it is a full-time job, a part-time endeavor or something in between, if you’re working for a rideshare service you need more than safe driving skills and a friendly personality – you need ridesharing insurance.
In brief, ridesharing insurance is a special policy that covers drivers who share their personal vehicle with other riders and are paid for the service. Think of it as a hybrid policy that covers the gaps between your personal auto insurance and any coverage provided by a rideshare employer.
So how exactly does ridesharing insurance work and what does it cover?
Here is where things get a little complicated. First, some explanation on how the ridesharing business works. Ridesharing jobs are broken down into three “periods” and each one is associated with insurance coverage through a driver’s personal auto insurance, their ridesharing policy, or coverage provided by the ridesharing company.
Rideshare drivers are covered by their personal policy only before they activate the ridesharing app and are available for customers.
Period 1 of rideshare insurance coverage begins once that app is triggered and you’re out and about waiting for a ride request. If you are driving for Uber or Lyft, at this point their insurance becomes active – but only for liability coverage for other vehicles or passengers. In other words, your vehicle is not protected by your personal insurance once the ridesharing app is activated, so rideshare coverage is needed to fill in the gap. Rideshare insurance extends your personal auto policy to cover your medical expenses, if injured, vehicle repairs and any property damage resulting from an accident.
Period 2 kicks in once you receive a ride request notification.
Period 3 is when riders are in your vehicle, and you are actively driving to their destination.
Your rideshare employer’s policy covers you during both periods 2 and 3. Major rideshare companies, like Uber and Lyft, offer up to $1 million in liability coverage and will match your car’s total value in a collision – if your personal policy also has collision coverage. Take note that both companies have comprehensive and collision deductibles.
So, you might ask, if my rideshare employer provides coverage while I’m on the job, why the need for rideshare insurance?
Period 1! There is a lot of potential for risk when a driver is on the move scouting for business. And without personal or employer coverage at this phase, you are on your own for any liability that may occur.
In terms of cost for rideshare insurance, there are a few factors to consider, including the value of your vehicle, your driving record and the area/location you’re driving in.
BayCoast Insurance can help direct you to the protection you need. Contact Us »