Your Guide to Uber Insurance: Get Insured Before You Get Wrecked
With one glance away from the road, even the safest drivers can get into accidents. When this happens on the job, Uber drivers to turn to Uber insurance — but what if your coverage ends up being far from enough?
Many rideshare drivers sign up for their gigs without knowing that their personal insurance policy won’t cover them on the job. At the same time, Uber insurance leaves gaps in your coverage that can leave you vulnerable in the case of an accident.
To solve these issues, many insurance companies are beginning to offer rideshare insurance to ensure all your needs are met.
Keep reading to learn what Uber insurance actually covers, what rideshare insurance is, and what policies you should invest in.
What Does Uber Insurance Cover?
Understanding the full extent to which Uber’s insurance program covers you will help uncover where you need extra protection.
Uber insurance can be broken down into four stages that provide different amounts of coverage:
- Offline: When you’re offline, you are covered by your personal policy. Uber insurance is not in place.
- Waiting for Requests: The moment you tap “Go” on your Uber Driver app and are available for ride requests, you are covered with Uber’s liability insurance only. In covered car accidents caused by the driver, this covers up to $100,000 per accident, $50,000 for bodily injuries per person, and $25,000 for any property damage you’re responsible for.
- En Route: From the time you accept a trip until you pick up your rider, your Uber insurance coverage is at its max. Your liability coverage increases to $1 million. If another uninsured driver is at fault, you’re covered for up to $250,000. If your personal car insurance policy includes comprehensive and collision coverage, Uber insurance will always cover your vehicular damage (with a $1,000 deductible) regardless of who’s at fault.
- On Trip: From the time you pick up your rider to the time you drop off your rider, you’ll receive the exact same coverage as when you’re en route.
As you may notice, the largest gap in your coverage is during the “Waiting for Requests” period, which often won’t provide enough financial help, especially if you’re involved in a major accident.
Even when you’re covered in full, you’re faced with a $1,000 deductible for your vehicle, and medical expenses can still pile up.
What Is Rideshare Insurance?
Auto insurance companies across the country are increasingly offering rideshare insurance as drivers are more and more drawn to Uber, Lyft, and similar gigs.
In fact, it’s becoming an insurance requirement for a growing number of providers. Many insurance carriers will actually penalize or drop you for not disclosing that you’re a rideshare driver, as it may be seen as an attempt to extend your coverage to a time when you’re driving commercially.
How ridesharing insurance works varies by the company, but typically, it will work in one of the following ways:
- Act as an add-on to fill in the exact areas where Uber insurance leaves gaps
- Extend your personal auto insurance to offer additional coverage while you drive for your rideshare company
- Replace your current insurance plan with one that’s more fitting for your career
Having this rideshare coverage will fill in the gaps in Uber’s commercial policy without forcing you to add an outrageous amount to your monthly bills.
Rideshare policies are often as low as $6 per month and rarely add more than $25 per month to your auto insurance bill, making them affordable for an Uber driver’s average income.
As with your personal auto policy, the final cost depends on your driving record, vehicle, age, and location.
What is the difference between Commercial and Livery Insurance?
Typically, commercial insurance will cover your vehicle if it used for business purposes. This can range from cars used exclusively for business purposes (travelling salesmen and estate agents) to trucks (delivery vans, contractors and tow trucks) and for-hire services such as limos.
Livery insurance, on the other hand, is aimed at and will cover for-hire services such as limos and taxis – as well as Uber and Lyft.
Can I not use my Commercial Insurance for Uber and Lyft?
This really depends on the commercial insurance policy you have and with which insurance firm you have it with. It is vital that when signing up for a commercial insurance plan that you enquire as to whether it will cover you as a driver for Uber or Lyft.
Those who already have a commercial insurance plan – and only assume it does – should speak to their carrier as soon as possible, to confirm. Only by speaking to an agent, can you ensure that it does. Otherwise, you might not be covered.
It is worth noting that commercial insurance policies are tailored on a case-by-case basis. This means that the rate you will pay will vary depending on your specific needs and requirements. However, you are not required to have a commercial insurance plan to drive for either Uber or Lyft, both of whom have their own insurance policy to cover you.
Should I sign up for Livery Insurance? Probably not
For the majority of rideshare drivers, the obvious answer for this question would be a flat-out no. There’s many reasons to back this statement up, including the fact that most drivers won’t earn enough to actually justify the cost of livery insurance. When considering livery insurance it is worth taking into account the following:
- It can be complicated to arrange a policy in a number of states and cities
- You will be required to update your paperwork and change your plates
- Cover might not be available for cars on lease; or if you have a loan on the vehicle
- Uber and Lyft already offer the same coverage, at no additional charge
If that wasn’t enough of a reason to turn you away from debating whether you need livery insurance or not, perhaps the cost will. This type of insurance can range anywhere from $6,000 – $10,000 a year for a car worth $10,000 – $20,000. There’s very few drivers for either Uber of Lyft that will be able to earn enough to cover that, along with all of their other expenses.
So, are there any benefits to having Livery Insurance?
Yes. At least, that’s the simple answer. Though, for the price, many might not consider it much of a benefit. As both Uber and Lyft already provide liability coverage to their drivers, you will not be receiving any additional benefit from having livery insurance on this front.
However, you will benefit from collision coverage. In this case, it will truly be up to you to decide whether this is a must-have or not. We expect most people, will not find it essential, however.
Best Rideshare Insurance for Uber Drivers
Sticking with your current insurance plan is often a smart choice, as many insurance companies will provide discounted prices when you have a bundle.
However, getting rideshare insurance quotes from multiple companies can help you find the best deal. Here are three of the most popular options for Uber drivers:
1. Mercury Ride-Hailing Insurance
One of the most budget-friendly rideshare insurance options around, Mercury’s insurance policy fills in the exact gaps of your Uber insurance policy. This means you’ll receive full coverage during the “Waiting for Requests” stage, and gain additional padding during your “En Route” and “On Trip” stages.
Though you must have a Mercury personal auto policy to qualify, the company offers hard-to-beat prices for their rideshare add-on, starting at just $0.20 per day (about $6 per month). Mercury ride-hailing insurance will get you exactly what you need, so you don’t have to waste a dime on unnecessary and undesired additions to your coverage.
Mercury insurance is available in Arizona, Florida, Georgia, Illinois, Nevada, New Jersey, New York, Oklahoma, Texas and Virginia.
2. GEICO Rideshare Insurance
If you’re hesitant about managing a second policy, GEICO rideshare insurance is a popular pick among Uber drivers. Built to completely replace your personal auto insurance policy, this hybrid option will cover your everyday and rideshare driving.
This way, your insurance will cover you through every single stage of driving. With the hybrid policy, you’ll only see a slight increase to your monthly auto insurance fees and receive lower deductibles.
The company specifies that this insurance option isn’t limited to rideshare drivers. If you drive for an on-demand delivery service like Instacart or Grubhub, you’re also eligible to receive this insurance.
GEICO rideshare insurance is available in all but 11 states, with exclusions including Hawaii and Texas. But the company is consistently offering this coverage to more locations.
3. State Farm Rideshare Insurance
Drivers who are currently insured by State Farm, or who are looking to switch, often prefer State Farm for its simplicity.
By adding 15%-20% more to your current premium for your personal auto insurance’s monthly cost, your coverage will include the “Waiting for Requests” period. Your coverage during the other stages will depend on your personal policy selections.
Admittedly, this no-hassle option can get a bit pricey, but the brand is trusted among drivers — even beyond the ridesharing world — and is available in all but seven states.
Frequently Asked Questions About Uber Insurance
Choosing to purchase rideshare insurance is a wise decision that will keep you financially secure, even if an accident occurs on the road.
Here are some frequently asked questions to help you decide how to proceed:
1. Can rideshare insurance be deducted from taxes?
While you technically can deduct rideshare insurance from your taxes — if it’s an add-on or an otherwise separate cost from your personal auto insurance — it’s not recommended by most drivers and experts.
This is because you can’t deduct both your insurance and your average mileage, and your average mileage will likely get you the larger deduction.
Still, we recommend keeping track of every business-related expense and consulting with your accountant before filing, as they can help you find the greatest deductions.
2. What can I do if my area doesn’t offer rideshare insurance?
While most states offer some form of rideshare insurance, this is still a fairly new concept. If your area doesn’t offer rideshare insurance, you can choose to purchase commercial auto insurance instead.
This will come with a significantly higher cost, often ranging up to $100 per month, though you’ll have this form of insurance already if you’re an Uber Black driver.
3. Are Lyft drivers fully covered by Lyft insurance?
No, Lyft drivers are covered in the exact same way that Uber drivers are covered but with a far higher deductible. This means that no matter which app you drive for, you’ll be left highly vulnerable when you’re waiting for requests.
You also won’t be covered to the extent that you should be while you’re en route or on trip unless you purchase rideshare insurance on your own.
4. Do I have to be a full-time driver to qualify for rideshare insurance?
In most cases, no. You’ll be able to sign up for this type of insurance no matter how much you drive. Insurance companies encourage or require rideshare insurance whether you’re a part-time or a full-time driver.
Insure Your Career
Uber insurance may appear to be all you need, but when you’re driving all through the day, it will leave you susceptible to large out-of-pocket fees in the event of an accident.
Plus, personal insurance companies are increasingly cracking down on drivers who don’t disclose their affiliation with Uber and other rideshare companies. Now you know the options you have to protect yourself.
Of course, rideshare insurance isn’t the only type of insurance you should be thinking about. As an independent contractor, you won’t receive benefits from Uber, which means you’ll have to look out for options yourself.