Driving for Uber or Lyft can put money in your pocket fast, but are you also putting yourself at risk for financial ruin? The commercials make it look easy to become a rideshare driver. For most drivers, it is easy until you talk about insurance. If you’re driving your car for personal business, you’re on your own personal auto insurance. However, when you’re on the clock with Uber or Lyft, you have to use their insurance. There are three phases:
  1. The app is on but you haven’t gotten a ride request, yet
  2. You accept a ride request, and you’re on the way
  3. You’ve picked up your rider and you’re taking them somewhere.
Phase 1 is when you’re really at risk. For example, if you get into an accident, and it’s your fault, Uber pays for the other guy’s damage and injuries, but you get nothing. So the car’s totaled, and you’re in the hospital and the insurance pays nothing. In some states, you can get what they call Gap Insurance to protect yourself, but “it’s very hard to find.” Phase 2 and Phase 3 offer more coverage, but the deductible is $1,000, and if you’re really hurt, you have to hope the payout is enough. That creates a temptation for a driver who gets in a wreck to tell their personal insurance carrier, oh no, I wasn’t driving for Uber or Lyft when this happened. And insurance companies aren’t stupid. “The insurance companies that we represent that we see throughout the state are very weary of insuring drivers who are driving for Uber and Lyft.”


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