Rideshare insurance: Do you need it?

Many of the best car insurance companies offer rideshare insurance policies in most states. If you are considering a rideshare policy or need to sign up with an insurer that offers rideshare coverage, enter your zip code below to reach out free, no-obligation quotes from some of the insurers we recommend.

What is rideshare insurance?

Rideshare insurance is a specific type of commercial auto insurance policy designed for people who drive for rideshare or food delivery services such as Uber, Lyft, DoorDash and Postmates. As soon as you turn on the Uber or Lyft app to start accepting passengers, a standard personal auto insurance policy will often no longer cover you for damages. In fact, some auto insurers may drop you from coverage if they discover that you used your car for a rideshare service without purchasing rideshare insurance. In short: When driving for personal use, a standard liability, comprehensive or collision insurance policy is in effect. If you use your car to earn an income (beyond driving to and from your place of work), you will need a commercial insurance policy. Standard commercial auto insurance policies are usually reserved for larger businesses. Such policies are designed to cover a fleet of vehicles or vehicles that are used exclusively for commercial purposes. As such, it doesn’t typically make sense for someone who occasionally drives for Uber to purchase this type of policy. That’s why some insurers sell rideshare coverage as a policy add-on — it provides coverage for one particular type of commercial use to drivers who are not necessarily running a full-scale business.

How much does rideshare insurance cost?

Companies like Geico, Progressive, USAA and Allstate all offer rideshare insurance for as low as $6 a month. Your own car insurance quotes will vary depending on your insurance profile, but for most drivers, the cost is under $30 a month for rideshare auto insurance. Rideshare insurance is significantly less expensive than commercial auto insurance. That’s because it is intended for people who may be using their personal vehicles for commercial use only part-time.

Do you need extra coverage as a rideshare driver?

Many rideshare companies, including Uber and Lyft, provide the following insurance coverages for their drivers:

• Bodily injury liability
• Property damage liability
• Underinsured/uninsured motorist coverage
• Comprehensive coverage
• Collision coverage

This means that you may not be legally required to purchase rideshare insurance, as you will already have the state-required minimums while driving for one of these services. However, there can be other consequences to driving without rideshare insurance. As mentioned, if you use your vehicle for commercial purposes without notifying your insurer, you could have your coverage dropped or see a premium hike. While most ridesharing companies provide collision and comprehensive insurance, the deductibles for these policies can be steep. Uber and Lyft drivers, for example, are provided with comprehensive coverage while en route to a ride request and while transporting a customer. But this coverage includes a whopping $2,500 deductible. Uber coverage also does not apply while parked, so if a tree branch falls on your hood and smashes your car while you’re waiting to pick up a customer, you’ll be out of luck. If you are parked and have the Uber app turned on, neither your own standard comprehensive policy nor Uber’s coverage will pay for repairs.

What happens if you don’t have rideshare insurance?

If you are involved in an accident while driving for a rideshare service, the rideshare company’s commercial policy should cover damages to the other driver’s vehicle. However, when your insurer finds out, you may be dropped from coverage. If you are at fault for an accident, the rideshare company may have a collision policy that pays to repair your vehicle, but it is likely to come with a high deductible. Additionally, your own insurance provider may not cover the cost of damage to your vehicle, even if you have comprehensive insurance and collision insurance policies. In the worst-case scenario, you may lose your insurance coverage if you are found to have used your car for commercial purposes without informing your insurer. Getting reinsured after an occurrence like this will be significantly more expensive than paying for rideshare coverage each month.

How to get rideshare insurance

To get rideshare insurance, simply contact your insurer and ask about coverage. Many providers will allow you to add rideshare coverage to your existing policy for a low monthly cost. The following major insurers offer rideshare insurance coverage:

• Geico
• Progressive
• USAA
• Allstate
• State Farm
• Farmers

Can you buy just rideshare insurance?

Most providers do not offer rideshare-only auto insurance coverage. Rideshare insurance is typically offered as an add-on or endorsement to an existing policy.

Our recommendations for rideshare coverage

If you are happy with your existing auto insurer, contact an agent to ask about rideshare insurance. The easiest way to get coverage is to add it to your existing policy. If you do not yet have insurance or your insurer does not provide rideshare coverage, you might consider switching providers.

Geico: Best Overall

Geico offers rideshare insurance coverage that replaces your existing Geico policy. By converting your personal policy to a rideshare policy, you will be covered by the same insurance whether the rideshare app is on or off. This is required for Geico customers who drive for any rideshare service.

USAA: Best for Military Families

USAA offers what it calls “Ridesharing Gap Coverage.” This is a policy add-on that provides protection for the coverage gaps between your personal auto policy and the coverage provided by an app-based transportation network company (TNC) such as Uber or Lyft. Most TNC insurance does not provide coverage for your vehicle while the app is on but you are parked and waiting for ride requests. This policy may also help cover the high deductible in the TNC-sponsored policy.

Our methodology

Because consumers rely on us to provide objective and accurate information, we created a comprehensive rating system to formulate our rankings of the best car insurance companies. We collected data on dozens of auto insurance providers to grade the companies on a wide range of ranking factors. The end result was an overall rating for each provider, with the insurers that scored the most points topping the list. Here are the factors our ratings take into account:

• Reputation: Our research team considered market share, ratings from industry experts and years in business when giving this score.
• Availability: Auto insurance companies with greater state availability and few eligibility requirements scored highest in this category.
• Coverage: Companies that offer a variety of choices for insurance coverage are more likely to meet consumer needs.
• Cost: Average auto insurance rates and discount opportunities were both taken into consideration.
• Customer Experience: This score is based on volume of complaints reported by the NAIC and customer satisfaction ratings reported by J.D. Power. We also considered the responsiveness, friendliness and helpfulness of each insurance company’s customer service team based on our own shopper analysis.

*By Home Media, Market Watch*