Increased popularity for ride-sharing and ride-hailing apps has exploded in the last year, allowing part-time drivers to earn as much as or more than professional taxi drivers. As a driver, you simply sign up with a ride company you like and use your personal vehicle to give customers a ride. But how does this affect your personal auto insurance policy? Are you even covered? Here's what you need to know about insurance if your drive for Uber, Lyft, or other ride app companies.
What Your Auto Insurance Does And Doesn't Cover
Most drivers for ride app companies do it only part time, meaning you probably have a full time job in the meantime. When you drive to and from your regular work, your auto policy covers you during that time in case you have an accident or other claim. However, your personal auto policy does not cover you and your car if you use it to drive for your work, like delivering pizza or flowers, or transporting people for Uber. You are hired to perform a service or business, which your auto policy will not extend to. So go ahead and take your friend to the airport or give that stranded guy a lift to the gas station for a gallon of gas. Just don't do it for money.
What You Can Do
Fortunately, large ride-sharing apps like Lyft and Uber provide you with commercial auto coverage. So while you are logged onto the app and driving people around, most policies automatically provide liability coverage in case you have an accident. Liability insurance specifically provides bodily injury coverage for people that may get injured in an accident, and property damage coverage for damage you may inflict on other cars. Liability limits may be lowered if you're in between passengers and not driving anyone.
If your driving company does not offer commercial coverage or you want higher liability limits than what they offer, consider purchasing your own. You can purchase liability coverage as high $1 million if you feel you need more protection. You may opt for your own commercial auto policy to cover you during your business endeavors, or you can purchase special rideshare insurance. This type of insurance covers you above your own existing personal auto policy, so keep in mind they must both be provided by the same insurance company.
You may also want your own coverage if the ride-share commercial policy does not insure you during all stages of your driving job, such as while you're waiting to be hailed for a ride. During certain times your liability limits may be very low or non-existent. This is where extra insurance comes in handy to fill that gap.
What To Look For
If you choose to purchase your own insurance for your ride-sharing, consider the following:
- Collison and comprehensive deductibles might be high. You can lower them if you're concerned about the likelihood you will use them.
- Make sure the insurance applies while you are waiting for a passenger and not just while you are driving a passenger. This way you have continuous coverage.
If you drive for any kind of ride-share or ride-hailing app, make sure you have insurance coverage the entire time you're behind the wheel. Check with your driving company to verify they have coverage for you as a driver, whether you are part time or full time. Don't rely on your own personal policy to insure you. In fact, your coverage may get cancelled if it is discovered you use your car for business. Talk to your agent about a commercial auto policy or a ride share policy for yourself if you are concerned.Share