How does Uber and Lyft driver insurance work?
Rideshare driver coverage changes depending on whether you’re on a trip or not.
If you’re a driver for Uber or Lyft, your insurance coverage differs when you’re on a trip versus waiting for a request. As you can see below, rideshare companies like Uber and Lyft (as well as most delivery companies like Instacart) divide the insurance coverage into three periods.
Period One – You’re online waiting for a ride request.
When you’re online and waiting for a rider request, Uber and Lyft offer contingent liability coverage. They provide up to $100K in liability coverage for bodily injury ($50K max per person). They also provide $25K in coverage for property damage. It’s contingent coverage because it only kicks in if your primary personal auto insurance doesn’t provide coverage. Most personal auto policies do not provide coverage during period one.
In a few states, Uber and Lyft provide coverage with higher liability limits, or offer primary coverage. During period one, neither Uber or Lyft provide collision coverage. Collision coverage covers damage to your vehicle.
Period Two – You’ve accepted a ride request and are enroute to the passenger.
After you’ve accepted a ride request, Uber and Lyft provide $1,000,000 in liability coverage and $1,000,000 in underinsured/uninsured driver coverage. They also provide contingent collision and comprehensive coverage. Uber’s coverage limit is “up to actual cash value” with a $1,000 deductible. Lyft’s coverage limit is $50,000, with a whopping $2,500 deductible. It’s contingent because you only have this coverage if your personal auto insurance policy has it. In other words, if you don’t have collision coverage in your personal auto policy, you don’t have it when you’re driving for Lyft or Uber.
Period Three – You’ve started the trip.
During period three, the insurance coverage provided by Uber and Lyft is the same as during period two. Both provide $1M in liability coverage and $1M in underinsured/uninsured driver coverage, and also provide contingent collision and comprehensive coverage.
Period three begins when you start the trip, and ends when you end the trip.
How do I get more rideshare insurance coverage?
If you want to have collision coverage, or more liability coverage during period one, you should consider purchasing rideshare insurance. Auto insurance companies offer one of two types of rideshare insurance coverage.
The first type of rideshare insurance is called gap coverage. This type of coverage extends your personal auto insurance coverage into period one, when Uber and Lyft offer low liability coverage and no collision coverage. Once you accept a ride, Uber or Lyft’s insurance takes over. Most insurance companies offer a variation of this type of rideshare policy.
The second type of rideshare insurance is total coverage. This type of insurance covers you when you’re offline and driving for personal use. It also provides primary insurance coverage when you’re driving for Lyft or Uber, during all three periods.
I’ll cover the different types of rideshare insurance coverage in more detail in tomorrow’s post.
For more information in the meantime, check out our Rideshare Central Insurance Marketplace to see which companies offer rideshare insurance in your area, and what type of coverage they offer.