It’s not enough to rely on your personal car insurance if you’re a rideshare driver, and the reality is that your personal policy most likely won’t cover you on the job. What many rideshare drivers don’t realize is that this creates a gap in coverage with your rideshare insurance.
The good news is that a number of big name and reputable insurance companies now offer policies to close that gap. A rideshare policy is an additional expense, but it can wind up saving you thousands of dollars if you wind up in an accident while you’re on the job.
Below I’ll explain how rideshare insurance works and which companies offer the best policies. With food delivery services picking up, there’s also information specific to drivers of Uber Eats, DoorDash, Postmates, and more.
You need rideshare insurance because it’s unlikely that your personal car insurance will cover any accidents while you’re driving for a rideshare company like Uber or Lyft. And while rideshare companies offer their own insurance coverage, it’s only for specific phases or periods of your ride.
Here’s how Uber insurance and Lyft insurance work for rideshare drivers:
- Offline phase: Rideshare app is off, and you are covered by your personal insurance policy.
- Phase 1: App is on, and you are waiting to accept a trip. Your personal insurance does not cover you, and rideshare insurance only offers liability coverage.
- Phase 2: You are en route to pick up a rider, and now Uber or Lyft insurance is covering you with a full policy.
- Phase 3: Rider is in the car with you on the way to their destination. Lyft or Uber insurance is covering you with a full policy.
You go back to phase 1 coverage as soon as you drop the rider off at their destination, creating a gap in your insurance coverage during that phase 1 period.
The policies offered by Uber and Lyft are virtually identical, except that Uber has a $1,000 deductible on vehicles offered through Vehicle Marketplace (rental cars Uber offers drivers).
Header | Uber and Lyft Insurance |
|---|---|
Offline | Personal auto insurance coverage |
Phase 1 | Third-party liability for covered accidents:
|
Phase 2 | Covered accidents receive:
|
Phase 3 | Same as phase 2 |
Deductible | $2,500 |
Food delivery apps have similar limited coverage
Anytime you’re making money with your car, you need to make sure you have the right kind of insurance coverage, and that goes for delivery services like Uber Eat and DoorDash.
Delivery services have more differences in coverage than Uber and Lyft. Here’s what you need to know:
- DoorDash: No coverage in phases 1-2, and up to $1 million of liability per incident.
- Postmates: No coverage in phase 1, and liability up to $1 million in phases 2-3.
- Uber Eats: Phase 1 liability of $50,000 bodily injury per person, $100,000 bodily injury per accident, $25,000 property damage per accident. Phases 2-3 coverage of $1 million liability per incident, plus comprehensive and collision up to the value of your car.
- Instacart: No coverage during any period
Food delivery services generally cover less than rideshare companies, but fortunately many rideshare insurance policies cover food delivery drivers too.
Rideshare driving has become so popular that the biggest names in the insurance world now offer comprehensive policies to cover rideshare drivers.
GEICO’s rideshare insurance is a hybrid policy that includes coverage for rideshare driving, delivery driving, and personal use. Most rideshare insurance companies only offer an add-on policy that covers the gap in your insurance. GEICO covers you when your rideshare app is off and through phases 1-3.
The major perk to using GEICO is that it simplifies your coverage. There’s one bill, and you file any claims with one company. GEICO also doesn’t have any mileage restrictions.
GEICO offers deductibles as low as $250, and you can contact them for a customizable quote.
Like other companies, GEICO generally won’t cover you if you’re driving a car you don’t own. And there are a few states that GEICO rideshare insurance doesn't apply: AK, GA, KY, MI, NV, NJ, NC, and UT.
Pros
Cons
Progressive offers add-on rideshare coverage for existing customers, and it’s a unique policy that can be customized to account for on- and off-season driving. For example, if you live in a touristy area and drive more during the summer months, you can use their policy for those specific periods.
The rideshare policy offered by Progressive includes coverage for food delivery drivers. Their policies are meant to fill the gap between personal coverage and on-the-job driving.
Progressive also offers livery insurance if you drive a taxi, limousine, or another commercial vehicle. Their for-hire livery insurance is available in 43 states.
Pros
Cons
Allstate has a rideshare insurance policy called Ride for Hire, an add-on policy to fill the gap between your personal policy and what Uber or Lyft covers. Their policy is meant to fit specifically in phase 1, when the app is on but you haven’t accepted a ride.
During phases 2-3, when your rideshare company gives you a full policy, Allstate may help you fill the gap in your deductible if you’re in an accident.
Uber and Lyft both have a $2,500 deductible, which is high for most drivers. Allstate’s plan can help make up some of that deductible — you’re looking at something closer to $500, which is much more affordable. Deductible gap coverage is an optional feature.
Unlike other rideshare insurance companies, Allstate’s policy is currently available in all states except New York. Most companies lack coverage in about seven states.
Pros
Cons
State Farm’s policy is another one that fills the gaps between your personal insurance and the rideshare company’s coverage. It’s meant to add coverage so you’re not stuck with liability insurance alone.
During phase 1, when you only have liability coverage with Uber or Lyft, your State Farm policy may include:
- Liability to others
- Damage to your car
- Medical coverage
- Emergency roadside assistance
- Rental reimbursement
- Uninsured/underinsured motorist
During phases 2-3 State Farm may extend all of the coverage above, except for liability. The same policy coverage applies to food delivery drivers too, which is great for anyone who is side hustling as a rideshare and delivery driver.
State Farm is upfront about how much your coverage may cost — they say it generally adds about 15% to 20% to your current auto insurance premium.
Pros
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You can expect to pay about $15/month or more for rideshare insurance. It’s hard to get a more exact estimate of how much you’ll pay because it’s based on individual factors like the kind of car you drive and your driving history.
Most insurance companies aren’t super transparent about their fees. Although State Farm clearly says that it will cost around 15% to 20% of your premium.
You can write off rideshare insurance when you do your side hustle taxes. And if you need help tracking your miles for a mileage deduction, check out my Everlance review.
Buying rideshare insurance is similar to buying any other auto insurance policy. There are add-on policies and hybrid policies, like the one GEICO offers. Add-on policies are only available through your current insurance provider.
You should start by contacting your personal insurance provider and ask them if they offer a rideshare policy. While you’re researching, check out:
- How they cover the gap in coverage during each phase
- If they offer help covering Uber or Lyft’s deductible
- If it’s available in your state
The first thing you need to do is to call the police. That should be your number-one priority because they can asses the damage, who was at fault, and get medical support for you if needed.
From there you’ll need to exchange insurance information with anyone else involved in the accident. This is where the phases are important. You’ll exchange your personal insurance provider during phase 1 driving. If the accident happens during phases 2-3, the claim will be filed with Uber or Lyft.
Driving for Uber or Lyft is a great way to make extra money, but you need to be fully protected if you’re in an accident, and insurance through those companies only goes so far.
That’s where rideshare insurance comes in. Start by seeing what your personal insurance provider offers coverage wise and how they can fill the gaps in your coverage.
The rideshare insurance policies out there can give you more than peace of mind, they can help you save thousands of dollars if you end up in an accident.
About Millennial Money Man
Bobby Hoyt is a former band director who paid off $40,000 of student loan debt in 18 months on his teaching salary and then left his job to run Millennial Money Man full-time. He helps other Millennials earn more through side hustles, save more through budgeting tools and apps, and pay off debt. He is a personal finance expert who has been seen on Forbes, Reuters, MarketWatch, CNBC, International Business Times, Business Insider, US News, Yahoo Finance, and many other personal finance and entrepreneurship media outlets.
