Best rideshare insurance options for Uber & Lyft drivers

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Are you considering becoming an Uber or Lyft driver, but not sure how your insurance would work?

You’re not the only one.

Transportation Network Companies (TNCs) like Uber and Lyft have transformed the way we travel in recent years.

These businesses, also known as ridesharing companies, have not only changed the world with digital disruption, but have also provided thousands of people with jobs.

The money and freedom of choosing your own hours are tempting for many, leading to waves of new drivers joining their ranks.
But, like any taxi driver, you must have proper coverage.

It doesn’t matter if it’s your own personal car – getting rideshare insurance is vital.

What is rideshare insurance?

In its simplest terms, rideshare insurance is a specific policy that every ridesharing driver is legally obliged to get if they want to work with a TNC like Uber or Lyft.

Once you start working for these companies, personal auto insurance will not suffice as the vehicle is being used for business purposes.

Why do Uber & Lyft drivers need rideshare insurance?

The Uber insurance policy has been a tricky issue for rideshare drivers ever since the inception of the company. Failing to get the correct insurance could prove to be a very expensive mistake, especially if the worst-case scenario happens.

Everyone who is on the road is taking a risk. That risk is amplified for drivers, for a few reasons:

• Their car is being used for commercial purposes.
• They are on the road for longer, which increases the likelihood of an accident as they are more susceptible to fatigue.
• They are responsible for the safety of passengers and therefore liable for any medical expenses if an accident happens.

An accident while working with Uber or Lyft could leave drivers with astronomical bills for vehicle damages and medical expenses, not only for them but also for any other parties involved.

Ultimately, by using your vehicle to work for a ridesharing company, the risk of a commercial lawsuit is massively increased. This makes insurance for drivers crucial to safeguard against financial ruin.

Where can I buy rideshare insurance?

In the early days, many personal auto insurance companies offered little help to drivers in the wake of an accident. In fact, some even cancelled policies of people who revealed they were working for a TNC.

As the popularity of Uber has boomed, it has led to better cooperation between personal insurance companies and the TNC insurance policies.

With the massive growth of the industry, there are now a lot of rideshare insurance companies to choose from. Some of the most renowned names include:

• Allstate
• Erie
• Farmers
• Geico
• SafeCo
• USAA
• Esurance

The advantages of HyreCar

Another option is HyreCar.

While not a household name like some of the rideshare insurance companies above, HyreCar does have an edge on some of the competition by providing people with rental vehicles, specifically to use for ridesharing purposes.

This has some great benefits for drivers:

• Insurance is included
• Pay as you go system
• Comprehensive coverage

How much is rideshare insurance?

Until quite recently, most insurance companies didn’t offer rideshare insurance to drivers. If they did, the tendency is to charge them a hefty premium to add it on to their existing policy.

Today, there is a plethora of rideshare insurance companies competing in this ever-popular market, with competition making it a little more affordable for drivers.

The added monthly cost can be less than $10, depending on the circumstances.

By comparison, HyreCar provides people with an alternative way of becoming a driver, that won’t risk them losing their current auto insurance.

They offer short contracts with the option of trying it for just 2 days. This high degree of flexibility and their fast booking process enables new drivers to rent a car and be on the road making money within 24 hours. This is a legal and cost-effective alternative to paying higher premiums on your personal auto insurance.

How does rideshare insurance work in an accident?

When a rideshare driver is simply using their vehicle for personal use, it is down to their own personal insurance policy to cover any incidents.

However, upon discovering that you got into an accident while working with Uber or Lyft, your personal auto insurance companies may class your car as a commercial vehicle. This means there is a very real chance you won’t get cover from them either.

This gray area has left somewhat of a hole in the system. So, this might leave you asking, “What’s the difference between rideshare insurance and commercial insurance?” Although Uber and Lyft do provide coverage while the app is on and you are driving, you will still need a personal insurance policy.

To understand this a little better, let’s consider how the rideshare insurance works. In the event of an accident, Uber has three periods that help to determine the coverage provided:

Period 1

This is when the driver is logged into the Uber app and is currently waiting to receive a ride request. Typically, a lot of personal insurance companies will not offer coverage when you have the app switched on. This is when rideshare insurance is activated.

Period 2

Rideshare drivers enter Period 2 whenever they receive a ride request and they are traveling to the pick-up point. During this period, the TNC will offer increased coverage. This is when Uber and Lyft cover you with their commercial insurance policy.

Period 3

Once the passenger is in the car, the driver enters Period 3. At this point, the rideshare insurance provided by the TNC will fully cover them.

As many insurance companies do not offer cover for ridesharing drivers, and the TNC policy does not cover Period 1, this creates a coverage gap.

This has led to some confusion, particularly when an accident does happen.

How to report an accident and file a claim

Accidents happen. While such an event may cause shock or stress, it’s important to follow procedure when the time comes.

• Check everyone is safe. First and foremost, drivers must ensure everyone is alive and well before doing anything else. Uber agree that this is the top priority.
• Swap Insurance information with all parties that are involved. This will make future proceedings go smoothly.
• Contact the TNC to report the accident. This is important and no driver should ignore this step.

Drivers using a HyreCar rental will need to contact support. This can be done by pressing the ‘Contact Support’ option on the dashboard, or by calling (213) 805-8677 between 6 am and 11:30 pm PST.

Best rideshare insurance options for Uber and Lyft drivers

The hole in the system has resulted in many companies now offering “Period 1” insurance. This is great for drivers as they are most vulnerable in that period.

Another key consideration is state coverage – drivers should ensure their auto insurance company can cover them for the state they will be doing ridesharing.

Here are some of the best rideshare insurance companies for Uber and Lyft drivers to consider:

1. Allstate

Although it doesn’t cover all states as you might presume, Allstate rideshare insurance can provide a solution for the Period 1 problem for drivers in over 40 states, saving drivers from disaster.

State coverage: AL, AR, AZ, CA, CO, DC, DE, GA, HI, IA, ID, IL, IN, KS, KY, LA, MA, MD, ME, MN, MO, MS, MT, NE, ND, NH, NJ, NM, NV, OH, OK, RI, PA, SC, SD, TN, TX, UT, VA, VT, WA, WI, WV

2. Geico

Geico offers insurance for drivers in most states. However, Geico rideshare insurance is reportedly more expensive than most, with reports of $150 increases in annual costs.

State coverage: AL, AR, AZ, CO, CT, DC, DE, FL, GA, IA, ID, IL, IN, KS, LA, MD, ME, MN, MO, MS, MT, NE, NM, ND, OH, OK, OR, PA, RI, SC, SD, TN, TX, VT, VA, WA, WV, WI, WY

3. Progressive

Unlike many competitors, this firm has been singing the praises of ridesharing. Progressive rideshare insurance covers several states including Texas.

State coverage: AZ, CA, GA, IL, NV, OK, TX

4. State Farm

For one of the most extensive options in rideshare insurance Washington can offer, State Farm rideshare insurance stretches their coverage beyond just Period 1. Drivers can deal directly with their own personal insurance company for any claim, even regarding incidents in Period 2 or 3.

State coverage: AZ, CO, IL, IN, KS, MN, MS, OK, OR, TN, UT, WA, WI

5. USAA (United Services Automobile Association)

Military members and their families who need the best rideshare insurance California has to offer will be able to use this company.The little gap while waiting for your next rideshare may not be covered by your auto policy, or even your company’s commercial policy. USAA can fill that gap with coverage for as little as $8/month.

State coverage: AZ, CA, CO, IL, MA, OH, TX, WA

The Bottom Line on Rideshare Insurance

Driving with a rideshare company such as Uber or Lyft, without proper coverage is a recipe for disaster.

It could cost you a lot more than your license or job.

HyreCar is a great option for people who want to become a rideshare driver, without the hassle of negotiating a new deal with their personal auto insurance firm.

Whatever route you decide, make sure you have proper coverage before opening that app.