Rideshare Insurance: What Is It, How Does It Work, and Why You Need It
The gig economy is thriving. In fact, more than 57 million US workers currently work in non-traditional positions as freelancers, contract workers, and on-demand service providers.
Though they work in dozens of different industries, one of the most popular is the rideshare industry. These workers use their personal cars to give rides to people who request them on their smartphones.
If you’re in search of affordable rideshare insurance in Illinois or Indiana, you’ve come to the right place. Insured ASAP Insurance Agency provides quality rideshare insurance quotes in minutes – Whether online or by phone!
For those looking to earn a little extra money outside of your day job, becoming a driver is a great option. But you need to make sure you have the right rideshare insurance before you sign up and get behind the wheel.
Here’s what you need to know about the coverage.
What Rideshare Insurance Is
Think of rideshare insurance as a type of commercial auto insurance that protects both you and your car when you’re working as a driver. It’s completely separate from your personal auto insurance policy and only kicks in when you’re driving for the rideshare company.
The insurance policy provides liability protection, comprehensive coverage, and collision coverage. If you’re involved in an accident while driving for your rideshare company, this insurance helps cover the cost of repairs.
Some insurance companies offer rideshare insurance as an endorsement on your personal policy. But others don’t and you’ll need to purchase a separate rideshare policy to be completely protected on the road.
Why You Need It
Major companies like Lyft and Uber provide rideshare insurance to their drivers. But there’s a catch. It doesn’t cover you all of the time.
When you’re waiting for a passenger to request a ride, rideshare companies only give you liability protection. This means you’re on your own to pay for the cost of repairs to your car.
Their coverage only kicks into full gear when you’re on the way to pick up a passenger or have a passenger in your car. Then, their policy provides you with liability insurance, collision coverage, and comprehensive coverage.
Sounds, okay, right?
It is, in theory. But there’s more to the insurance issue than meets the eye.
Your Personal Policy Could Get Cancelled
You’re using your personal car to drive for rideshare companies. Those companies make a distinction between when you use the car for personal activities and when you’re working. Your personal insurance provider doesn’t.
In fact, you could lose your coverage if they find out that you’re using your car to earn money. This is because you bought your personal auto insurance policy with the expectation that you’d be using the car for personal reasons.
The insurance company based your premiums on the risks you’d experience using your car for yourself. These risks are the ones you’d experience commuting or running errands.
As a professional driver, the risk of getting into an accident increases because you’re spending more time on the road.
Worse, many insurance providers have a “for-hire” exclusion on their coverage. This gives them permission to cancel your policy if they find out that you drive for a rideshare company without commercial insurance.
By working as a rideshare driver, you’re effectively voiding the contract you signed when you bought your insurance.
With dedicated rideshare insurance, you’re covered and you won’t lose your personal insurance policy.
Company-Provided Coverage Isn’t Enough
Yes, rideshare apps do provide coverage when you’re transporting passengers. But that coverage isn’t as comprehensive as you might think.
Like all insurance policies, the ones provided by your chosen rideshare companies have a limit.
If you’re at-fault for an accident and the damage to your passengers and the other drivers on the road exceeds that limit, you could get sued for the balance. Depending on the accident, this could cost you thousands of dollars.
If you’re not at fault, the company-provided coverage will cover the costs of the damage after you file a claim with your insurance company.
If you have a rideshare policy, you’ll be fine. Between your rideshare insurance coverage and the company-sponsored policy, you’ll likely only have to pay the deductible.
But if you don’t have rideshare insurance or a rideshare endorsement from your insurance company, you risk losing your personal coverage altogether. Then, you could end up paying hundreds of dollars out-of-pocket to fix the damage while also having to look for a new insurance policy.
What You Need to Do
If you’re thinking of driving for a rideshare company, the first thing you should do is speak with your insurance provider. Make sure they don’t have a “for-hire” exclusion as part of the insurance agreement.
If they do, ask what you need to do to maintain coverage.
Should your insurance provider say they won’t cover you if you drive for a rideshare company, start shopping around.
Look for insurance providers that specialize in rideshare insurance. These providers understand that you’re just looking for an honest way to make money and will help you protect yourself and your car when you’re working.
Get Rideshare Insurance Now
If you’re thinking about driving for Lyft, Uber, or another rideshare company, congratulations! You’re well on your way to earning money with a flexible job. But make sure you’re ready for the experience.
Get a quote for rideshare insurance today and make sure you’re protected before you give your first ride.
If you’re ready to start exploring your coverage options, contact our team today to discuss your insurance needs. We have the right policy for your car and your budget.
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