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Texas law requires that rideshare drivers carry a higher level of insurance than people who only drive for personal trips. In addition, most car insurance companies in Texas require you to buy special coverage in order to be covered while you drive for a transportation network company (TNC). For most people driving for companies like Uber and Lyft, this results in 15%–30% higher car insurance rates.
Texas Auto Insurance Requirements for Rideshare Drivers
In order to become a driver for a TNC, including Uber and Lyft, you must have auto insurance coverage that extends beyond the Texas minimum amount while driving for the rideshare company. The exact amount of coverage required varies depending on which "period" of rideshare driving you are in.
Period 0: While the rideshare app is off and you are using your car for personal purposes, you only need coverage that meets Texas insurance minimums.
- $30,000 of bodily injury liability coverage per person injured in an accident
- $60,000 of bodily injury liability coverage per accident
- $25,000 of liability coverage for property damage per accident
Period 1: While you are using a ridesharing app and looking for someone to pick up, Texas requires you to have increased levels of liability coverage:
- $50,000 of bodily injury liability coverage per person injured in an accident
- $100,000 of bodily injury liability coverage per accident
- $25,000 of liability coverage for property damage per accident
You may need to purchase this coverage yourself, or it may be provided by the rideshare company you work with. Confirm with your TNC provider to see what coverage you need. Both Uber and Lyft provide "contingent" driver coverage during this period: You're required to purchase coverage on your own, but if your insurer rejects your claim, your TNC's insurance will protect you.
Some insurance companies don't allow you to purchase variable levels of coverage that go into effect at different times, so you'll have to buy a policy to meet those higher limits. For example, rideshare drivers who insure their vehicles with Progressive will be required to purchase the highest amount of coverage to protect them during all driving periods.
Periods 2 and 3: While you are on your way to pick up a rider (Period 2), or have a passenger in your car (Period 3), the required liability limits are much higher: $1 million for death, bodily injury and property damage (total) per accident. However, both coverages are almost always provided by the TNC you're working with. Uber and Lyft also both provide you with $1 million uninsured/underinsured motorist coverage per accident. Uber actually goes a step further, as it provides contingent collision and comprehensive coverage that go into effect while you are carrying passengers.
How Much Does Texas RideShare Insurance Cost?
We found that adding rideshare insurance coverage generally increases your insurance bill by 15%–30% from standard Texas rates, when other coverages are identical. If you're currently carrying the minimum amount of insurance coverage, your rates will increase even more, since you will be required to increase the coverage limits to be eligible to drive for a TNC.
Furthermore, the exact price difference varies significantly by provider. Progressive only charged our sample rideshare driver 15% more to add rideshare coverage, while Farmers increased the premium by around 30%. If you are considering becoming a driver with a TNC, we highly recommend checking with multiple Texas car insurance companies to ensure you're paying the lowest price, even if you already did so the last time you bought car insurance. Every company charges a different amount for rideshare insurance.
Some insurance companies, like Liberty Mutual, don't provide special coverage, but they do allow you to participate in ridesharing on a normal consumer policy. Other insurance companies don't offer ridesharing coverage at all.
We strongly discourage drivers from trying to hide ridesharing activity from their insurance companies. If you get into an accident while operating as a rideshare driver and your insurance company finds out, there's a good chance it will deny your claim and drop your insurance.
Requirements to Drive for Uber and Lyft in Texas
In addition to the insurance requirements, you'll need to meet several conditions to become a driver with Uber, Lyft or another TNC in Texas. In general, you'll need to be at least 21 years of age, have a valid driver's license, have at least one year of driving experience, and pass a driving history and criminal background check.
The car you use also needs to meet certain minimum specifications. Both Uber and Lyft have multiple levels of service and different requirements for your car depending on that level of service. More premium services have more elaborate requirements, but you'll also make more money.
Requirements for Uber and Lyft Drivers in Texas
- 21+ years old
- Pass a background check
- Pass a DMV check
- Valid driver's license
- Sufficient car insurance
- Vehicle registered in the state of Texas
Uber has different minimum star ratings for each of its driving levels. If your rating goes below a threshold, you may not be able to pick up new riders.
- UberX/UberXL: 4.6 stars
- UberSelect: 4.75 stars
- UberBlack/UberSUV: 4.85 stars
As levels of service increase, Lyft also has more stringent star ratings for its drivers, although the requirements are not as strict as Uber's. To drive for a particular service tier, you need at least the following ratings:
- Lyft/LyftXL: 4.6 stars
- Lyft Lux: 4.6 stars
- Lyft Lux Black/Lux Black XL: 4.7 stars
Uber Vehicle Standards
Any vehicle you use for Uber in Texas, regardless of service level, must be under 10 years old (15 in some cities) and must be in good condition. The car needs four doors and enough factory-installed seats and seat belts to accommodate everyone—at least five, including you. You must also have Texas-specific insurance and registration, although you don't need to be registered in a specific city to work as a rideshare driver there.
Uber also has the following service level-specific requirements.
|Program||Car age/year||Car model||Seats||Interior|
|UberX||Less than 10 years old (15 in some cities)||Any||5+ seats||Good condition|
|UberXL||Less than 10 years old (15 in some cities)||Any||7+ seats||Good condition|
|UberSELECT||2008 or newer||Luxury sedan (specific models)||5+ seats, no full-size vans||Leather or vinyl, great condition|
|UberBLACK||Less than 5 years old||Black luxury sedan (specific models)||5+ seats||Black leather, great condition|
|UberSUV||Less than 5 years old||Black SUV (specific models)||7+ seats||Black leather, great condition|
Lyft Vehicle Requirements
Every Lyft car in Texas must be model year 2002 or newer, have four doors, and have at least five seats and seat belts, including the driver's. You'll also need to meet the legal insurance minimum, and the car must be registered in Texas.
Lyft drivers have different options for the level of service they want to provide. As the service levels increase, your earnings will increase, but so do the eligibility requirements.
|Program||Car age/Year||Car model||Seats||Interior|
|Lyft||2002 or newer||Any||5+ seats||Good condition|
|LyftXL||2002 or newer||Any||7+ seats||Good condition|
|Lyft Lux||2013 or newer||Black luxury vehicle (specific models)||5+ seats, no full-size vans||Great condition|
|Lyft Lux Black||2013 or newer||Black luxury sedan (specific models)||5+ seats||Black leather or vinyl, great condition|
|Lyft Lux Black XL||2013 or newer||Black SUV (specific models)||7+ seats||Black leather or vinyl, great condition|