Rideshare Insurance: Why You Need It and What It Costs

Rideshare Insurance: Why You Need It and What It Costs

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If you're working as a rideshare driver, it's essential to include rideshare coverage on your car insurance policy.

It's an affordable way to protect yourself while you're working for Uber, Lyft or another rideshare company — it typically costs under $100 per year.

Regular car insurance policies only protect you while using your car for non-commercial purposes, so they don't apply when you're working as a rideshare driver. Rideshare companies provide some coverage for their drivers, but there are gaps that could leave you responsible for significant costs after a crash.

What's more, if your insurer finds out you have been working as a rideshare driver without notifying them, they may cancel your policy altogether.

How much is rideshare insurance?

Car insurance with rideshare coverage is not much more expensive than a regular car insurance policy. We found that adding a rideshare endorsement to an existing car insurance policy typically increases your rates by less than $100 per year.

Insurer
Average cost of rideshare coverage
Auto-Owners$66
Grange Insurance$86
Progressive$91
State Farm$68
USAA$28

However, keep in mind that if you're carrying low levels of coverage on your car insurance, you may need to increase your limits in order to meet your state's coverage requirements — leading to a higher insurance bill.

For example, in Ohio, rideshare drivers are required to carry at least $50,000 in bodily injury liability coverage per person and $100,000 per incident. That's double the amount required for personal passenger vehicles.

Rideshare drivers should consider increasing their insurance coverage limits beyond what they would choose as regular drivers. People who drive for Uber or Lyft, or deliver food for companies like DoorDash, are behind the wheel more often and for longer periods of time. This inherently increases the likelihood that you could be involved in a car crash, so extra protection is worth the investment.

We also recommend that drivers purchase comprehensive and collision coverage, even if your car is paid off. As a rideshare driver, you depend on your vehicle for income, so not being able to get it fixed promptly after a crash means you won't be able to earn money.

Do I need rideshare insurance?

Buying a rideshare-specific insurance policy may not be legally required to work as a rideshare driver where you live. However, we strongly recommend that all rideshare drivers add an endorsement to their policy or, at a minimum, consult with your insurer before signing up.

Rideshare insurance in New York City

Unlike nearly every other city in the United States, rideshare drivers in New York City are required to carry commercial car insurance purchased through a special insurance company.

Rideshare drivers in NYC also need a commercial driver's license, and they must register their vehicle with the New York City Taxi and Limousine Commission.

For these reasons, most Uber and Lyft drivers in NYC work full time; it's not easy to do so occasionally, like in other cities.

There are two reasons for this. First, if you get in a crash while ridesharing, your insurer will not likely cover the cost of the claim. Rideshare companies provide some coverage (more on that below), but depending on when the accident occurs, you may have limited coverage from Uber or Lyft.

Second, if your insurer ever finds out you're driving for Uber or Lyft without its knowledge, it may cancel or non-renew your policy, forcing you to find a new insurer — often at higher rates.

If you're working for a delivery app like Grubhub or Doordash, you don't have passengers in your car like a rideshare driver, but we still recommend buying extra coverage — they're usually covered under the same endorsement. Your regular car insurance likely won't fully protect you if you're using your car to make money.

Do Uber and Lyft provide insurance?

Yes, Uber and Lyft provide insurance to their drivers while they are driving. However, the coverage provided by Uber and Lyft isn't as straightforward as a regular car insurance policy, as you're protected at different levels depending on what you're doing.

Stage

Function
Coverage from Uber/Lyft
Off dutyDriving normallyNone (covered by personal insurance)
Period 1Your rideshare app is on, but no passenger is matched
  • $50,000/person for bodily injury
  • $100,000/accident for bodily injury
  • $25,000/accident for property damage
Period 2A passenger is matched and you're on the way to to pick them up
  • $1,000,000 for third-party auto liability
  • Uninsured/underinsured motorist bodily injury and/or first-party coverage
  • Contingent comprehensive and collision up to the actual cash value of the car ($2,500 deductible)
Period 3You're driving a passenger to their destination
  • $1,000,000 for third-party auto liability
  • Uninsured/underinsured motorist bodily injury and/or first-party coverage
  • Contingent comprehensive and collision up to the actual cash value of the car ($2,500 deductible)

When you are off duty, whatever regular insurance you have will cover you if you get into an accident. During Periods 2 and 3, Uber and Lyft will fully protect you across all types of coverage you may need in an accident: liability, collision, comprehensive and underinsured motorist.

During Periods 2 and 3, both Uber and Lyft cover damage to your vehicle — but with a $2,500 deductible, meaning you'll be responsible for that amount after a crash. Rideshare insurance you purchase can help fill that gap, as long as you carry collision and comprehensive coverage.

Period 1 is a gray area, when you're active on the app, but not yet matched with a passenger. This is sometimes called the "gap". A personal car insurance policy is void during this time.

Uber and Lyft offer "contingent insurance" for that period, but their policies don't provide complete protection: the coverage only includes liability insurance. This means it will only pay out for any medical expenses incurred by someone else injured in an accident, or any damage you cause to other people's property. Any personal medical expenses or damage to your car are not covered under Uber or Lyft’s contingent policy.

Which companies offer rideshare insurance?

Most major car insurance companies offer rideshare insurance to their customers. We found that eight of the top 10 car insurance companies offer insurance that protects you while operating as a rideshare driver.

Insurer
Offers rideshare insurance?
ProgressiveYes
State FarmYes
GeicoYes (separate policy, not an add-on)
AllstateYes
USAAYes
Liberty Mutual
FarmersYes
TravelersColorado and Illinois only
Nationwide
American FamilyYes

Note that availability varies by state. In states with complex taxi rules or expensive car insurance, like New York and Michigan, insurers that offer a rideshare endorsement may be harder to find.

Methodology

To understand the cost of rideshare insurance, we collected quotes from five top insurers that offer a rideshare endorsement in Ohio. All quotes are for a 30-year-old driver with good credit and no recent incidents on their record.

ValuePenguin's analysis used insurance rate data from Quadrant Information Services. These rates were publicly sourced from insurer filings and should be used for comparative purposes only — your own quotes may be different.

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.