If You Are a Uber or Lyft Driver, Check Your Insurance Policy
The Insurance Coverage Gap for Ride Share Drivers
I've been an Uber and Lyft driver for two years. I am also an insurance agent, so I knew to check my personal policy before I logged onto the app and started driving.
What was interesting to me was even though I am a licensed agent, I found the subject somewhat confusing until I took some time to study and learn. I realized that if I was confused, others must be also.
Following is a general overview of how insurance works in regards to ride share. Hopefully it will give you enough information to understand it. It's not a complicated subject, but it is a new subject.
I can only speak to drivers in California, but this would apply to anyone in the United States who is driving for a ride share company.
Most Personal Policies Don't Cover You When Ride Sharing
Your personal auto policy is not designed to provide you any coverage when you drive for a ride share company. That is considered to be commercial use and requires a commercial auto policy, such as those written for limo drivers and taxi drivers. In fact, most personal auto policies exclude coverage for any commercial use.
Ride share is a new business and it has taken insurance carriers a while to figure out what to do, if anything, to provide coverage for your personal auto. Some carriers have figured it out and offer additional coverage you can purchase for ride sharing.
Are You Insured for All Three Stages of The Trip?
There are three parts to the coverages when it comes to accepting fares. Let me break them down for you.
- Part A is when you log onto your ride share app but don't have a fare. This is where there is a coverage gap for all of us. Yes, Uber and Lyft do provide coverage for you, but may not when you are logged in, looking for fares, but haven't accepted a ride. If there is some coverage available, it may be limited to low limits and no collision coverage for your car. This is where there is a huge gap in coverage.
- Part B is when you've accepted a fare and are driving to pick them up. This is when the insurance for the ride share company kicks in.
- Part C is when you've picked up your fare and are driving to their destination. The ride share's insurance coverage continues to be in force.
Once you drop them off and confirm it has been done, you then start again at Part A.
A "Ride Share" endorsement is for Part A. What it does is take your personal auto coverage and extend it to cover you for any accidents. It gets rid of your gap in coverage and protects you, your passengers, and your vehicle (should you have physical damage to your vehicle).
Without the endorsement, you will be responsible for paying for all damages out of your own pocket.
Insurance Adjusters Will Ask if You Were Ride Sharing
I know from working with insurance companies, and having my own collision loss, one of the first questions an insurance adjuster will ask you when you report a claim is "Were you driving for a ride share company?"
Most insurance companies will NOT extend this coverage for food deliveries, which is why I don't do Uber Eats or Door Dash. I stick with passengers only.
Please check with your insurance agent before you log on again to ride share and make sure you have the proper coverage. If they don't offer it, find a company that does.
Be safe out there and make sure your policy is correct.
This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.
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© 2019 Susan Lewis