Rideshare Insurance Explained

Rideshare Insurance Explained

Personal car insurance is not enough to protect the rideshare drivers. Personal car insurance policy does not cover the Uber or Lyft drivers because it covers only personal use vehicles. Personal car insurance does not provide coverage to the vehicles which are used for business purposes. If you drive a car for business purposes to earn income then you need to purchase a rideshare insurance policy.

Who is eligible to purchase rideshare insurance?

Requirements to sign up for rideshare insurance are different for both Uber driver or Lyft driver.

  1. Minimum requirements for a uber driver to sign up for rideshare insurance

  • Uber drivers must have a driver’s license.
  • Uber drivers must have an eligible four-door vehicle.
  • Uber drivers must meet the minimum age to drive in the city. In most states, the minimum age to drive legally is 16 years.
  • Drivers under the age of 23 years must have driving experience of a minimum of 1 year or 3 years.
  • The driver needs to provide proof of residency in the state.
  • Uber drivers must provide a driver profile photo in line with Uber’s designated specifications.
  • Drivers must undergo online screening, drivers should have no criminal record. The driving record of the driver should be reviewed.

  1. Minimum requirements for Lyft’s driver to sign up for rideshare insurance

  • The driver must have a valid driver’s license.
  • The driver must get a four-door vehicle through Lyft’s Express Drive rental car service.
  • The driver must provide proof of registration and car insurance.
  • The driver must meet the minimum age in the state.
  • The criminal record and driving history of the driver must be assessed.

How does rideshare insurance work?

Rideshare insurance is an additional insurance policy that is beneficial for Uber or Lyft drivers. Rideshare insurance protects your vehicle and others’ vehicle against the damages in case of an accident. Rideshare insurance also helps to cover the expenses of injuries to you and other drivers caused by car accidents. You are required to purchase rideshare insurance if you are a Lyft driver or Uber driver. When you use your car for business use then you will become a high-risk driver for an insurer so your personal car insurance does not protect you against the damages. Rideshare insurance covers you, turns on your Uber or Lyft’s app and start accepting rides. When you start using your car for commercial purposes such as transporting people then you need to purchase rideshare insurance. Lyft or Uber provides additional insurance to their drivers but these policies come with several coverage gaps.

Rideshare insurance companies sometimes offer you comprehensive coverage which helps to cover the heavy cost of damages caused in an accident. 

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Rideshare insurance gaps

Following are the coverage periods when you drive Lyft or Uber:

  • Coverage period 1

Coverage period 1 is a period when the app is on but the driver is waiting for the passenger. In this period limited liability coverage is provided by the rideshare companies. Limited liability coverage provides protection against the damages to others’ vehicles and bodily injuries to others.

  • Coverage period 2

Coverage period 2 is a period when the app is on and the driver accepts the ride request. In this period the driver is on the way to pick the passenger. Contingent comprehensive and collision coverage is provided by the Uber or Lyft companies. 

  • Coverage period 3

Coverage period 3 is the period when the app is on and the passenger is in the vehicle. The driver is transporting the passenger to his or her destination in this period. Rideshare companies provide comprehensive and collision coverage until the driver drops the passenger in coverage period 3.

Coverage limits for rideshare insurance of both Uber and Lyft:

Type of Coverage  Coverage limits
Bodily injury coverage per accident $100000
Property damage coverage per accident $25000
Comprehensive and collision coverage $100000
Bodily injury coverage per person $50000

High deductibles for Uber insurance policy is $1000 and high deductibles for Lyft insurance policy is $2500. 

Rideshare insurance experts recommend to purchase the following insurance limits:

  • $100,000 of bodily injury coverage limit per person
  • $300,000 of bodily injury coverage limit per accident
  • $100,000 of property damage coverage limit.

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