About 1.5 million to 2 million people drive for rideshare companies like Uber and Lyft in the United States. They earn an average of $18.15 an hour before expenses, so just one car accident could easily eat up that money—and more. That’s why rideshare drivers need separate rideshare insurance to supplement their personal auto insurance and the coverage rideshare companies provide by default.
To understand which insurance policy applies at what time, it’s important to know the three phases of a rideshare:
- Available: The driver is available to pick up a passenger but has not accepted a ride yet.
- En route: The driver has accepted the ride and is going to pick up the passenger.
- On the trip: The driver has picked up the passenger and is taking the passenger to their destination.
When the driver’s rideshare app is turned off, their personal auto insurance applies. But when they turn on the app, Uber and Lyft provide some coverage for the driver, and separate rideshare insurance would pick up the rest.
Personal auto policies typically exclude rideshare trips. Your auto insurance company priced the policy assuming only personal use, that you’re only driving yourself, your family, and friend. Rideshare driving puts a lot of extra miles and wear on your vehicle, and it exposes you to increased risk you wouldn’t face from solely personal driving.
For someone who only purchases the legally mandated minimum liability coverage for their personal auto insurance, Uber or Lyft’s coverage likely seems sufficient. However, this can still leave a rideshare driver exposed to potentially large losses in the event of an accident during a rideshare ride.
This is why a separate rideshare insurance policy is helpful. For example, rideshare companies don’t provide collision or comprehensive insurance while the driver is waiting for a ride request, and if the app is on, their personal policy won’t, either. So if a driver experiences a collision during that time, the only insurance that would cover it is a dedicated rideshare policy.
At Kamm Insurance Group, we want to make sure rideshare drivers are fully covered, whether they’re working or not. We don’t want your side hustle to result in losing money. Contact us so we can help you get all the auto coverage you need, whether you’re using your car for work or personal use.