Rideshare Insurance Isn't the Only Way to Protect Yourself While Driving for Uber or Lyft
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Ridesharing is a popular way to make money. Whether you are supplementing your income or driving full time, Uber and Lyft allow drivers the freedom to work as often as they want.
Freedom and flexibility are an attractive combination, but there are specific responsibilities and precautions to keep in mind when working in rideshare. Having proper coverage is imperative, and rideshare insurance is not the only way drivers can protect themselves.
Make sure you have the right insurance while ridesharing | Twenty20
When embarking on the journey as a rideshare driver, many drivers aren’t aware that their personal auto insurance does not cover them while the app is on, since they are now using a commercial vehicle to gain income. If a driver is involved in an accident with only personal insurance, their insurance provider has the right to drop their policy.
Commercial auto insurance is usually costly, so rideshare companies have evolved to meet driver and consumer demands. Major rideshare services, including Uber and Lyft, developed their own coverage so drivers can lower the cost of insurance. Unfortunately, that coverage has some significant flaws.
The most significant risk when relying on coverage provided by Uber and Lyft is that it does not cover drivers when they are waiting for riders. This means while there are no riders in the car, neither traditional personal policies nor rideshare policies cover the driver—even if the app is on.
In addition, Lyft and Uber rideshare insurance carry relatively high deductibles. This means drivers are responsible for accidents until their deductible is reached. That could cost drivers as much as $2,500 of their hard-earned money.
Alternative rideshare insurance options
Luckily, traditional insurance companies are beginning to acknowledge changing needs in insurance coverage. Several companies have created insurance policies specifically for rideshare drivers. These policies replace personal insurance and coverage for the driver at all stages of driving, no matter if their app is on or off.
Popular insurance companies like Geico have developed all-inclusive options for rideshare drivers. Smaller companies have excellent new options as well.
Some companies only cover the gap in insurance drive times while others cover the driver at all times, so drivers should make sure they understand their policy completely.
LLC provides additional protection
Another way to make sure your profits stay in your pocket is to develop an LLC for your rideshare business. It doesn’t matter if driving is your full-time job or merely a side hustle. Working with a rideshare company puts you at risk for potential lawsuits and insurance claims.
According to Signature Insurance, developing an LLC for your rideshare business keeps your personal income and assets protected. Plus, it helps to keep the income separate come tax time.