How Does Auto Insurance Work With Uber And Lyft?
Uber and Lyft ridesharing insurance options are different than your personal auto insurance policy. Your personal auto insurance will not cover your vehicle while you're working. Uber and Lyft ridesharing coverage is available, but coverage is minimal and only applies when you are actively driving customers. We recommend supplementing Uber and Lyft's ridesharing insurance coverage with your own additional ridesharing insurance policy from your provider.
Free Auto Insurance Comparison
Secured with SHA-256 Encryption
UPDATED: Nov 12, 2020
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider.
Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.
New age taxi services like Uber and Lyft are growing increasingly popular in cities across America. Uber is now available in over 100 cities in the United States and is regularly adding more cities to its scope of areas-served. Lyft is available in nearly just as many places. The reason these ride-sharing services are expanding so rapidly is that they offer lower cost, more convenient alternatives to your traditional taxi or yellow cab. All one needs to do to get a ride with them is to download their mobile app and then tap on the button to get catch a ride.
Many people are lured to Uber and Lyft because of the many promotions they offer. Referring a friend to the service will get you a free ride or a substantial coupon. Without the coupons, these new car hire services are still a much cheaper option than your traditional taxi. Being so inexpensive does come with a cost, however, and many people are worried about whether or not Uber and Lyft drivers have sufficient insurance.
Below, we will try and help you understand more about Uber’s and Lyft’s ridesharing insurance options, how they work, and whether or not you will need to buy a supplemental insurance policy if you decide to drive for them.
Does The Company Provide Insurance Or Does The Driver Provide Insurance?
Uber and Lyft require all of their drivers to have an active insurance policy when they are driving. Not only is driving without insurance against company policy, but it is also against the law to drive without insurance in all 50 states.
The issue that is involved with insuring in Uber or Lyft driver is whether or not to classify it as commercial insurance. The vehicles driven by these drivers are used both for business and pleasure. When they are not driving customers, they are often driving around going about their daily lives – doing errands, commuting to their job, etc. Furthermore, the vehicles are owned not by Uber or Lyft but rather the taxi driver himself.
Personal auto insurance policies often do not cover business use of a vehicle. Commercial auto insurance policies are often much more expensive than personal auto insurance policies and usually come with the stipulation that the car is to be used for business purposes only.
What complicates things even further is the fact that ride-sharing companies are reluctant to take responsibility for insurance liability. Uber and Lyft have their own supplemental insurance that they offer to drivers to cover them when they have customers in their cars. Often times, however, this coverage is not sufficient. For example, while driving for Uber, you are covered by their insurance, but when you are driving around trolling for passengers, you are not. The problem is, while you are hunting for customers, your personal policy will not cover you, as this is a business practice.
Compare over 200 auto insurance companies at once!
Secured with SHA-256 Encryption
Getting Insurance As An Uber or Lyft Driver
Luckily, for Uber and Lyft drivers, more and more insurance companies are offering insurance to rideshare drivers. As more and more people turn to Uber and Lyft for part-time or full-time work, insurance companies are starting to realize that their traditional policies are not up-with-the-times (as most drivers secretly rely on their personal policies for coverage). Because of this, an increasing number of insurance companies are starting to develop ridesharing or hybrid products to cover their drivers. As of January 2016, many major insurers like GEICO, Progressive, Farmers, and Allstate are already offering products for ridesharing.
Because of confusion regarding the insurance side of things, many drivers end up committing insurance fraud without even realizing what they are doing. A reported 92% of drivers for these services do not tell their insurance companies about their little side-business. 72% of drivers are not even sure what coverage is offered by Uber and Lyft. These drivers could be setting themselves up for real trouble down the road if they end up getting into an auto accident. If you are planning to start driving for Uber or Lyft, you should first contact them to find out your best option for insurance. If you are looking to purchase a personal insurance policy and are looking for ways to save money, check out this article.