Ridesharing apps like Uber and Lyft have gained massive popularity due to their convenience, tracking ability, and friendly drivers. Since this industry began, millions of rideshares are taken monthly, and billions of consumers’ dollars are spent on them annually. So, if you’ve been considering becoming a ridesharing driver for Uber or Lyft, it’s important to know what kind of auto insurance you’ll need and what kind of coverage these two companies provide.
Do Uber and Lyft Provide Auto Insurance?
There are a couple specific scenarios in which Uber or Lyft’s insurance policies will cover an accident.
When the App is Off
When the Uber or Lyft app is turned off, the ridesharing companies’ insurance is not responsible for providing coverage. You must file an insurance claim with your personal auto insurance.
Waiting for a Request
This occurs when you are in your car with the app opened but haven’t accepted a ride request yet. Both Uber and Lyft provide liability coverage to any third party involved in an accident. This can cover another person’s medical bills or damage to another vehicle. This means you and your car are not backed by the ridesharing app’s insurance policy. Your standard auto insurance may not cover damages to your car either because it was being used for commercial purposes.
Request Accepted on a Trip
You are covered by Uber and Lyft’s insurance policies once you are on route to pick up a passenger and the whole time until the ride has ended in the app. They will typically provide coverage for:
- Your liability to a third party.
- Uninsured or underinsured motorist bodily injury coverage.
- Contingent collision and comprehensive coverage but only if you already have this covered by your personal auto insurance.
Make sure to visit Uber and Lyft’s insurance policies for more details on the coverage they provide.
Why Uber and Lyft Extended Coverage
In 2015, before Uber offered liability insurance to a third party, an on-duty Uber driver hit and killed a 6-year old girl in San Francisco. This was a complicated case because although the driver was logged into the Uber app, he was not on route to pick up a passenger nor was there a passenger in his car. This caused confusion among who’s insurance was going to cover the damages and injuries. After this incident, both Uber and Lyft began including liability coverage to their insurance policies when the driver is waiting for a ride request.
Do You Need Commercial Auto Insurance to Become a Driver?
Although you can become a driver for Uber or Lyft with a standard auto insurance policy, it is best to tell your insurer that you drive for a ridesharing company. They may offer an extension to your current auto insurance policy like endorsements, a gap policy, or a combination of auto and commercial insurance to cover accidents when you are driving for the ridesharing service. These additions cost about an extra $20 a month.
The most important step to take if you’re considering driving for Uber or Lyft is to check with both your insurance company and ridesharing service to make sure you have the proper coverage. If you have any questions or concerns regarding your coverage, contact TJ Woods Insurance, and we can help you create a comprehensive auto policy suited to your needs.
