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.
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.
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.