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I Drive for a Ridesharing Company. Am I Covered?

A young, Caucasian ridesharing driver who has commercial vehicle insurance smiles at a passenger in the backseat.

Driving for rideshare companies like Uber and Lyft has become a great way to earn a side income for a lot of people. Rideshare drivers get paid by these companies when people request a ride through an app on their smartphones, and are driven to their destinations in the drivers’ own vehicles. It’s convenient for the users and provides a flexible and potentially lucrative job for the drivers, but many of the drivers are unaware of the need for good rideshare auto insurance coverage.

Is Ridesharing Insurance Really Necessary?

Rideshare driving is a business – the drivers are not employed by the companies, but rather are contracted. This means that they are self-employed; owners of their own businesses. All businesses require the proper insurance, and as a Lyft or Uber driver, affordable auto insurance that covers your paid driving time is essential.

With both Lyft and Uber, insurance is provided, but it is limited. Both companies categorize your driving time into 3 Periods. Period 1 is the time when you’ve indicated within the driver app that you are available, but are still waiting for a ride request. Period 2 is the time after you accept a request and you are on your way to pick up a passenger. And Period 3 is the time that the passenger is riding in your vehicle. While Periods 2 and 3 are covered by the Lyft or Uber insurance policy, during Period 1 your liability coverage is much less and you won’t have collision coverage at all from these companies.

In addition to the limited coverage provided by the rideshare companies’ insurance policies, you could have problems with your own personal auto insurance. If your insurance company finds out that you are a Lyft or Uber rideshare driver, it is very likely that they will drop you, which will probably result in increased rates when you replace your coverage.

In addition to dropping your coverage, if you’re in an accident and found to be at fault while working as a rideshare driver, your insurance company can refuse to cover you. If that happens, you are personally responsible for medical and vehicle repair expenses for yourself, your passengers, and anyone else involved in the accident.

How Can Rideshare Insurance Benefit Me?

If you’d like to be a Lyft or Uber driver, insurance is important. In addition to providing coverage during Period 1 and preventing your own insurance company from dropping your coverage, your rideshare policy could even cover a portion or all of your deductible during Periods 2 and 3.

The normal deductibles under Uber and Lyft’s coverage are $1,000 and $2,500, respectively – not insignificant amounts by any means. In the event of an accident, avoiding or reducing these out-of-pocket expenses appeals to many drivers.

On top of covering deductibles, your rideshare insurance can give you coverage above the normal limits offered by Uber’s and Lyft’s insurance.

Getting Rideshare Insurance

Rideshare insurance is now available in every state and the District of Columbia. This wasn’t always the case, but currently there’s at least one company offering coverage in every state, and most have several options. If you are happy with your current insurance provider, that would be a good place to start your search, though it would be smart to request a rideshare insurance quote from several companies for comparison.

If you have questions about rideshare insurance or want to purchase a policy, give Freeway Insurance a call at (800) 777-5620. We’ll help you determine which companies offers ridesharing insurance and find you the best rate. Don’t go unprotected – give Freeway a call today!

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