Rideshare driving is a great way to get a leg-up and make some extra cash, but it is not a good place to get stuck without coverage.
What is rideshare insurance?
Rideshare insurance plans offer coverage for rideshare drivers where gaps in the rideshare company policies leave you vulnerable. Most of these policies will also cover the personal use of your vehicles, as well as those risky gap times when you are on the clock but still not covered.
If you are a rideshare driver, rideshare insurance is for you. Regardless of whether you work on a full-time or part-time basis, you could be subject to major
liabilityshould something go wrong on the job.
Why do delivery, Uber, and Lyft drivers need additional insurance?
If you are driving for a big company like Uber or Lyft, you might wonder why you would need to purchase additional rideshare insurance when you are already covered by their company insurance policy.
Although rideshare apps provide some coverage to their drivers, they do not provide full coverage for every moment you are on the job.
This makes depending on your standard
car insurancerisky, especially considering that a standard insurance provider may drop your existing private policy if you file a claim and they discover you are using your vehicle for commercial purposes such as transporting goods or people.
How much does rideshare insurance cost?
Rideshare insurance can be purchased as a hybrid policy or an optional add-on from your existing insurer.
The good news is that rideshare insurance is usually less expensive than a full commercial auto insurance policy. The bad news is that it will probably be more expensive than a personal vehicle insurance plan. You will pay a higher premium, but you will be insured with the extra damage protection that you need when you are on the job.
Prices for rideshare insurance policies can vary significantly from provider to provider and will depend on a range of personal factors like credit score, driving history, and location as well. Keeping that in mind, a rideshare insurance policy may cost as little as $10 a month to upwards of double the cost of a standard personal car insurance policy.
The big thing to keep in mind when you compare car insurance quotes for a rideshare insurance policy is that there are plenty of great opportunities to save if you have the tools you need to generate a full range of cheap car insurance quotes.
How Uber and Lyft insurance work
Companies like Uber and Lyft require you to have a private insurance provider in addition to the company insurance that they automatically provide when you become a driver. However, what you might not realize is that there is a critical gap period where neither insurance option is likely to come into full effect.
Neither the rideshare company insurance policy nor your standard policy will fully cover you during the period where you are on the job but haven’t yet accepted a ride or delivery request.
Even if you are involved in an accident in one of the periods that is fully covered by the standard Uber or Lyft company insurance policy and you need to file a claim, you will likely be responsible for paying a $2500 deductible. Essentially, you will end up paying for any damages that amount to less than your deductible even if you are technically covered by your company policy at the time.
Uber and Lyft insurance by period
In the case of Uber or Lyft, the company insurance policy either kicks in or doesn’t kick in according to a designated period of the ride that you are in the process of completing. The system works as follows:
Period 0: Covered by Personal Insurance
This period covers any time when the rideshare app is not turned on. During this period, you will be covered by your personal insurance policy.
Period 1: The Gap Period
This period refers to the specific time period where your app is turned on but you are still waiting for or haven’t yet accepted a customer request.
This is the gap period where you are not covered by your standard personal insurance policy or the rideshare app policy. If your company insurance policy provides coverage at this point, it will be very limited. This means that you and your vehicle are left vulnerable during this crucial period.
Period 2: Covered by Uber or Lyft Company Insurance Policy
Once you accept a ride request and head out toward your set destination, your rideshare company insurance policy will fully come into effect.
Period 3: Covered by Uber or Lyft Company Insurance Policy
Once you pick up a passenger and have them in your car, you are still fully covered by your rideshare company’s insurance package until the ride is marked complete.
As you can see from the information above, Period 2 of the rideshare process is either sparsely covered by your company insurance policy or not covered at all. This is where rideshare insurance covers the gaps. You will be covered by the same consistently strong policy regardless of whether you are on or off the job at any particular time.
Delivery service insurance by period
If you are driving for a delivery app service, it’s important that you take some time to check out your company car insurance policy to find out exactly what you are covered for and what isn’t covered.
It is also crucial to know whether you actually have company insurance or not in the first place. Some delivery app providers like Instacart and Grubhub don’t provide any company insurance on your vehicle, but will require you to take out a policy. Meanwhile, other providers like DoorDash will offer limited company liability insurance, but you won’t always be covered when on the job.
The schematic for delivery app companies that do offer limited company insurance usually looks something like this.
Period 0: Covered by Personal Insurance
This period covers any time when the delivery app is not turned on. During this period, you will be covered by your personal insurance policy.
Period 1: A Potential Gap Period
This period refers to the specific time period where your app is turned on but you are still waiting for or haven’t yet accepted a delivery request.
During this gap period, you might not be covered by either your standard personal insurance policy or the delivery app’s policy. Generally speaking, if your company insurance policy provides coverage at this time, it will probably be limited.
Many drivers will require a supplemental rideshare insurance policy to make sure they are covered during this in-between period.
Period 2: A Potential Gap Period
Unlike Uber or Lyft, not all delivery app companies will provide you with company insurance when you are driving to pick up a delivery but haven’t received the product yet. In some cases, once you accept a request and head out toward your set destination, your delivery app company insurance policy will fully or partially come into effect.
Period 3: Covered by A Relevant Delivery App Insurance Policy
Once you pick up the goods and have them in your car, you are fully covered by any company car insurance policy. However, if your company doesn’t provide insurance, you will be left vulnerable should you be involved in an accident while delivering a product.
As you can see from above, many delivery app drivers could potentially be left uninsured at any period of the process. At other times, you might only receive limited coverage by your company insurance policy if at all.
When you invest in the right type of rideshare insurance policy, you can rest assured that you will never be left out in the cold by your company and personal insurance providers when on the job.
The best rideshare insurance companies
Geico rideshare insurance
Geicooffers a hybrid insurance policy that will cover you for work and personal purposes.
Geico doesn’t impose mileage restrictions, which is a major plus for drivers who work long hours. Delivery drivers and rideshare drivers are eligible for the Geico rideshare insurance coverage.
While Geico offers one of the strongest all-around rideshare coverage packages, it is more costly than some of the other options available so it might not be the best pick if you are on a tight budget.
Rideshare coverage packages also aren’t available in all 50 states, meaning that you won’t be eligible if you are based in New York, Michigan, or any of the other handful of states that are not covered.
State Farm’s rideshare insurance
State Farm offers a great add-on policy if you are looking for a specific coverage option that will kick in during the gap period where your company rideshare insurance policy leaves you vulnerable.
This is a good option if you are happy with both your standard company insurance policy and your private car insurance coverage.
State Farm rideshare insurance is available in almost every state (with a few exceptions) and doesn’t come with any pesky strings like mileage restrictions attached.
If you work for both a rideshare service and delivery app service like UberEats, you can extend your coverage without having to worry about paying a higher premium. On the downside, it is somewhat pricey for what it includes. You might be able to get a better deal by going with a more comprehensive policy or budget rideshare insurance package.
Allstate’s Ride-for-Hire package
This policy is still a good coverage option for Uber drivers, but the potential deductible savings are not as big because Uber has a more manageable company policy deductible of $1000.
The Allstate rideshare insurance policy functions as an add-on to an existing private car insurance policy. Basically, should you be involved in an accident while in any of the periods covered by your rideshare company policy, the personal rideshare add-on will help you cover the difference between the company deductible and Allstate’s much lower average deductible of about $500.
On the upside, the premiums are quite affordable and it is available in almost all 50 states. On the downside, you have to have an existing Allstate car insurance policy in place in order to subscribe and Allstate doesn’t guarantee that you will be covered when you are on the job, so you still might be left vulnerable during the gap periods while working.
Progressive’s rideshare insurance coverage
The stand-out feature of
Progressive’srideshare insurance package is that it is one of the most customizable rideshare insurance plans available.
Progressive gives you the ability to alter the price of the package depending on the frequency you drive for rideshare companies. For example, they account for "on" and "off" seasons of the year while enjoying the peace of mind of knowing that you will be covered year round without overpaying for your coverage.
The downside to the Progressive rideshare plan is that the pricing system is not very transparent and it is highly individualized, making it difficult to accurately price out options when you compare car insurance quotes.
Where can I get rideshare insurance?
The type of rideshare insurance available to you may be limited according to what state you live in. Here are some of the state limitations for the major providers:
Geico Rideshare Insurance is available in all states except:
State Farm’s Rideshare Insurance is available in all states except:
Allstate Ride-for-Hire Coverage is available in all states except:
Progressive’s rideshare insurance coverage is limited to only certain states.
The following regions are not eligible: AL, AR, AZ, CO, CT, DC, FL, GA, IA, ID, IL, IN, KY, LA, MA, ME, MI, MN, MO, MS, ND, NE, NM, OH, OK, PA, RI, SD, TN, TX, UT, VA, WA, WI, WV, WY.
What happens if I’m in an accident while I’m driving for an app?
If you are driving for companies like UberEats, Postmates, Uber, and Lyft, you will be fully covered, up to a $1 million limit for medical expenses and other damages you may cause, by your company insurance policy. This coverage only applies to Period 2 and Period 3 while you are working.
However, when you make your claim, you will be subject to a deductible that is likely to be upwards of $2500. In addition, you will not be covered if you are hit by another driver who is uninsured. Anybody who causes an accident during Period 1 will be required to file a claim with their private provider, and the company may or may not fill in the gaps if the claim is rejected.
This is where having a private rideshare insurance policy can save you major headaches. Not only will some rideshare insurance policies help to significantly lower your deductible, but most will cover you during this critical gap period where you run the risk of being caught without a safety net.
How to file a claim
If you are involved in an accident with a vehicle used for rideshare or app delivery purposes, here is the protocol to follow.
Call the police
This applies whether you are working for a rideshare service at the time or using the vehicle for personal purposes. It is a good idea to have the following documents on hand should they be required:
- Any relevant Rideshare company certificate
- A copy of the Rideshare company rules
- Proof of your personal insurance
While waiting for the police to arrive, if possible, exchange any relevant information with the other driver. This should include the following:
- Legal name
- Contact information
- Insurance information
Contact your insurer
Contact your personal insurance provider as soon as possible. Even if it is a situation where the employer’s insurance will cover the damage, it is very important to be totally transparent with your personal provider since they will find out about the accident regardless.
Notify the app company
Notify your rideshare or delivery app employer about the accident. If company coverage applies, you can begin your claims process from here.
How to buy rideshare insurance
If you work for a delivery app or rideshare provider, purchasing rideshare insurance will help give you the peace of mind of knowing that you are always covered on or off the job.
If there is one thing to take away from this all, it is that private rideshare policies can differ significantly, both in terms of price and the extent of coverage they provide. That means finding the perfect package can be easier said than done.
Your job can’t wait, so why should you have to wait to get covered where you need it most? Come check us out at Jerry today to find out more.
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