Car Insurance for Uber and Lyft Drivers
If you’re not currently an Uber or Lyft driver, you’re probably reading this because you’re considering signing up to drive and earn some extra money. As ride-sharing is becoming more and more popular, drivers must be aware of their car insurance policies to be sure they don’t run into any insurance surprises in the case of an accident. Because many drivers are under the impression that car insurance for Uber and Lyft is provided under a standard policy, many learn that’s not the case until an accident occurs.
Uber and Lyft are two ride-hailing tech services that feature a quick & easy way to get from here to there without the hassles and other costs that come with using a taxi or cab. Uber and Lyft also provide car owners with a convenient way to earn a quick buck.
If you are a Uber or Lyft driver in Chicago, Illinois — or you’re thinking about signing up — you may have questions about car insurance.
- Will your current auto insurance cancel you?
- Will your insurance policy cover you while you’re driving for a fee?
- Do Uber and Lyft provide drivers with their own insurance policy?
- What happens if you get in an accident?
How Rideshare Companies, Uber and Lyft, Different than a Regular Taxi Cab Service?
The fact that Uber & Lyft and most taxi cab services don’t own or operate their cars and do not Uber and Lyft are similar to most taxi services in that they don’t own or operate their cars and they hire drivers indirectly, treating them as independent contractors – 1099 employees. The notable difference is that most Uber & Lyft drivers use their cars for personal and business use alike. This element makes car insurance a common confusion.
A valid and in-force auto insurance policy is a requirement for driving for a rideshare service like Uber or Lyft. But that insurance policy may not provide coverage to you in the case of an accident while you are in-route to, or driving, a passenger.
Many personal auto insurance policies explicitly exclude driving for hire in the policy contract. This means that Uber or Lyft drivers with a “for-hire exclusion” in their policy will not be covered while they’re driving for a fee.
In actuality, driving for a ride-hailing service like Uber or Lyft can In fact, driving with Uber or Lyft will more than likely put you at risk for having your car insurance dropped, non-renewed, and even your claim denied if your insurance carrier discovers you are driving for-hire. This varies by policy and state, so be sure to check your car insurance policy contract.
Car Insurance for Uber and Lyft – Don’t They Provide Insurance?
Uber and Lyft do provide some supplemental car insurance which only covers you when you are actively driving professionally and have your smartphone app switched on — not when you’re driving for any other reason.
This supplemental insurance also depends on what stage of the ride hailing process you’re at:
IF YOU’RE LOGGED IN AND WAITING FOR A RIDE REQUEST…
Both Uber and Lyft provide contingent liability coverage that pays only for losses not covered by your personal policy.
Our contingent liability coverage is designed to provide coverage when the app is in driver mode before you’ve received a ride request in the event your personal insurance does not respond. The policy has a $50,000 maximum limit per person, $100,000 maximum limit per accident, and a $25,000 maximum limit for property damage. There is no deductible under this policy.
IF YOU’RE DRIVING PASSENGERS OR ON THE WAY TO PICK THEM UP…
Both ride-share services provide:
- Commercial liability insurance with a $1,000,000 coverage limit
- Uninsured and/or underinsured bodily injury insurance with $1,000,000 coverage limit.
- Contingent comprehensive and collision coverage
This contingent comprehensive and collision coverage differs slightly between the two ride-share tech services. Uber has a $1,000 deductible, and Lyft has a $2,500 deductible and a limit of $50,000. You should know that both deductibles are dependent on you having your own personal comprehensive and collision coverage too.
Uber may also extend some personal injury protection (PIP) in certain states that require it by law.
What Insurance Do I Need?
There’s no doubt that driving with a ride-share company like Uber or Lyft can make car insurance complicated.
The good news is, many insurance companies have recognized the need for new and different insurance policy options. Insured ASAP partners with dozens of A-rated carriers that have created auto insurance programs specifically for Uber & Lyft drivers.
Advice from Insured ASAP – The Leading Provider of Insurance in Chicago…
- Get the most comprehensive personal car insurance policy you can afford.
- Check local laws and regulations.
- Understand your liabilities while driving.
Need more information? Ready for an insurance company that’s there for you when you need them? We’re waiting for your call!