Curious about whether or not you need rideshare insurance? In the most simple answer: if it’s available in your state, you most definitely should. This article will go over everything you need to know about car insurance for driving professionally.
Even though most drivers for hire work part-time hours or don’t do it as their main income source, it’s still considered to be commercial use, because you are indeed getting paid for the service you provide. Many insurance companies only cover for when you are using your car for personal use.
What this means is if you’re using your car for any type of business or money making purpose, you may not be insured unless you have the proper type of insurance. If you are driving your car for a ridesharing app like Lyft or Uber, it’s important to make sure your insurance policy includes rideshare insurance coverage.
Here’s What We’ll Talk About in This Article:
- Why You Need to Notify Your Insurance Company You’re Driving for Lyft/Uber
- Understanding Coverage Gaps Between Policies Between You and the Company You are Driving For
- What Features and Benefits Your Policy Might Include
- How to Buy Rideshare Insurance
- Ways to Earn More as a Driver
This is a long article, but we hope you read all of it, because it can save you quite a lot of hassle and potential problems in the long run!
No matter what type of professional driving you do, you should definitely make sure your policy includes rideshare insurance to make sure you, your passengers, and your vehicle are eligible for coverage in the event of an accident. Fortunately, there are a lot of great options, and you may be able to even apply online or at the very least get a free quote.
Do I Need Rideshare Specific Insurance?
Many people are unaware that your personal car insurance policy may not actually cover if you are professionally driving as a driver for hire with passengers. Your personal coverage typically only covers you and your regular passengers who spend time with you in everyday life situations - such as a friend or family member.
Most of the insurance companies out there offer commercial insurance. Companies such as StateFarm and Geico actually specifically offer Rideshare insurance, which is very convenient if you are already insured by these companies. However, it is important to note you cannot use both insurance companies - you will need to make a decision! Also, some states are not eligible for this type of coverage, so if that applies to you it is best to explore a full commercial policy.
The best thing you can do is call up your existing insurance agent to see what options exist.
Don’t Uber and Lyft Provide Insurance?
Uber and Lyft each have their own policies to cover drivers, but in the world of insurance, it is always best to protect yourself. The policies these types of ridesharing company apps have are meant to protect them and their company. It is best to view their policies as a backup plan in case your own commercial driver insurance would not cover what you need.
The biggest reason you would want your own ridesharing insurance policy is because this way you have full control over what coverage you have on your vehicle. You can choose your deductibles as you wish and as is available in the state you reside and work in most often.
Commercial driving policies for insurance actually aren’t as expensive as you might think. There are quite a lot of great deals out there, and you may only pay 10-15% more each month, depending on the company and what the laws are in your state.
When you think of the increased liability you have as a professional driver, this is quite a good deal. If an extra $15-$20 a month can save you thousands, it’s well worth it.
As technology advances, most companies are able to differentiate between when your coverage is personal use or ridesharing use. If the app is on, you are available for hire, and then you are most definitely going to be taking advantage of the extended coverage. Most of the companies have their policies designed to work depending on what the app is set for. For example, if you have the app on, but don’t have passengers, you may have different coverage than if you were to have passengers in transit in your car.
While this may seem like technical minor details, it actually makes a lot of sense, especially with the way Uber and Lyft have structured their own insurance policies.
What Does Rideshare Extended Insurance Coverage Include?
There are a lot of benefits to having Rideshare insurance added to your current policy. While the exact coverage you get will depend on your car, your driving history and record, the amount you drive, and the options available in your state, most of the companies include these basic features:
- Your Personal Liability to Others: This includes most often your passengers, but will also apply to pedestrians who are walking along the street
- Automotive Damage: Should you be in an accident, this would account for any damage done to your vehicle.
- Medical Expenses: In case of an accident, medical expenses can add up quickly.
- Motorists Who Are Uninsured/Underinsured: If another driver hits you and has no insurance or very little insurance {think state minimum} - this will help cover any gaps.
- Rental Car Coverage or Reimbursement for Car Rental Fees: This is convenient if your car is damaged and you need to rent a car to drive while it is being repaired.
- Emergency Road Side Assistance: Not all car insurance companies offer this, but it can be a great peace of mind to know you can call someone if you find yourself stranded on the side of the road for any type of reason - whether a minor fender bender or a flat tire.
Please note, this is only a very general overview of what might be covered with your policy. The specific details may or may not actually include these items and will vary across the location.
Most states have their own insurance laws and limits, so it is important that you read your contract carefully. This information provided here is mostly for example - we do not sell insurance nor can we offer any legal advice.
There may also be certain terms and conditions that would cause certain aspects to not be covered. You should always check with your insurance agent and actually read the policy word for word to know what exclusions may apply.
How to Buy Rideshare Insurance
The first step to purchasing rideshare insurance is to research the current insurance laws and requirements in your state. Each state has different laws and legal minimums and requirements.
If your state is not eligible for insuring you as an Uber driver or driving for Lyft, you may need to instead explore commercial policies as an option. You can learn about which laws apply to you by looking up on usa.gov to find the appropriate Consumer Protection Office.
Step 1: Contact Your Current Provider or Agent
Once you’re aware of what specific laws and regulations apply to you and govern the place you live or plan to work in, your next step step is to check with your existing insurer. Your current insurance company may have the perfect solution for you - and it could only be a phone call away to get the liability coverage you need and to put the policy into effect.
You should always inform your existing automotive insurance company that you are driving professionally for a ridesharing company. If you do not, they may cancel your policy completely, or worse, you may find yourself in need to file a claim and they will not cover anything.
This is your best option if you are already currently insured by companies like State Farm or Geico is to call your existing agent. Both of these providers offer this as a hybrid type policy to add on to and extend your existing personal coverage plan in states where such as policy is legal and allowed.
If you can easily add it to your existing plan - fantastic! This means you’ll be able to get started right away without the hassle of changing your information or needing to fill out any lengthy paperwork.
However, if your current insurance company does not provide hybrid insurance for car-for-hire services or rideshare insurance options, do not despair. There is hope!
Step 2: Research and Explore Options
That phone call you make to your agent is the very easiest and most simple step to making sure you have all of your bases covered. Your agent may be able to refer you to commercial companies that would be able to provide coverage should they not have something that would be appropriate to minimize your liability costs.
Even if you are already with a company that provides hybrid insurance for rideshare app drivers for hie, you may wish to continue exploring other options. Determine how much coverage is necessary and works best for your needs and your budget.
You may also ask your agent for additional saving possibilities. For example, many companies will provide discounts for multiple services, so you may be able to add on life insurance or your homeowner or renter’s insurance to get even more savings and peace of mind.
Step 3: Fill Out the Necessary Paperwork
Paperwork is a hassle, but it’s often required. Don’t just settle for a phone call - tell your agent you want a copy of the contract and agreement! If you are unsure of your legal rights and what is going to give you maximum protection, don’t hesitate to contact a qualified financial advisor or attorney.
It may seem like overkill, but it can also really help you weigh the risks and benefits of your choices. Many small business lawyers would be happy to talk with you for a small one-time rate or as part of other benefit packages you could be eligible for.
Don’t Let Extra Costs Get You Down: Here’s How to Make More as a Driver!
You might be discouraged by learning it could raise your auto rates by driving for Lyft or Uber. Fortunately, there are tons of ways to earn more driving for these companies than you might initially think!
If you’re ready to drive for higher profits, you’ve got to check out The Rideshare Code, which is the complete manual to earning more money driving for companies like Uber and Lyft. It might just be the best investment in your business you can make!
The Rideshare World is Your Oyster!
There are so many opportunities to earn driving with companies like Uber, Lyft and others. While it may seem like an upfront hassle, taking the time to really research and explore your rideshare insurance options now can help you avoid a lot of serious problems later down the road.
Do you have questions about how to research the laws in your state for ride share insurance or driving professionally as a car-for-hire? Have tips or experience in doing this? We’d love to hear your comments, suggestions, and questions in the comments section below - it will help us to help more drivers just like you!
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