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Ride share / Delivery Coverage - Am I Covered?

April 1, 2021

Ride-sourcing or “ridesharing” as it’s commonly known is the process of transporting customers for a fee through the use of a privately-owned vehicle. Delivery would be considered any type of delivery service you provide in exchange for money. It has recently become popular among drivers who are looking to gain a little extra income outside of their normal 9-5 jobs to sign up for Uber, Lyft, Instacart etc. Most car insurance policies do not allow “drive for hire” under a personal auto policy, so drivers run the risk of not being covered properly if they have an accident while driving for a rideshare company. Engaging in ridesharing activities opens you up to potential liabilities that your personal auto policy may not cover. Plus, an insurer could cancel or non-renew your policy if they find out you’re engaging in ridesharing activities without notifying them. Always contact your auto insurer before you start ridesharing to make sure you’re not violating the terms of your policy, and to add rideshare coverage.The same rules apply when you use your vehicle for delivery services such as Doordash or Uber Eats. You are still using your car for business, so your personal auto insurance no longer applies.

What Your Personal Car Insurance Policy Covers

Personal auto insurance policies are just that: personal. They are designed to cover your vehicle, its passengers, and any vehicles and passengers involved in an accident with you during normal, everyday use. The exact details of your coverage will depend on the policies and limits you select, but regardless, none of these personal policies is designed for commercial use.

Where Your Insurance Stops

Generally speaking, insurance companies consider that your personal coverage stops as soon as you turn on your ridesharing app and do not resume until you turn it off. During this time, you are using your vehicle for commercial purposes and thus in need of a commercial policy. Personal Auto Insurance policies will not cover a driver who is transporting people or belongings for money. Insurance companies have commercial policies designed for these purposes. Again, Doordash, Postmates, and other delivery apps such as Insta Cart etc. are considered to be a commercial risk and this activity is not covered by your personal auto insurance.

What Coverage Do I Need for Ridesharing or Delivery? Without some additional insurance—either purchased by you or provided by your ridesharing service—you are essentially uninsured from the moment you log in to your ridesharing app on until you log out. The National Association of Insurance Commissioners (NAIC) has identified three separate "exposure periods" during this period that may need different levels of insurance

Period 1: The app is on, but you are awaiting a match for a customer. Period 2: You have matched with a customer and are en route to pick them or their order up. Period 3: The passenger or goods are in your vehicle.

Your Ridesharing Insurance Options

Relying on the company you work for to cover you. Lyft and Uber, for example, both insure their drivers as follows:

Period 1: Liability coverage of $50,000 injury per person, $100,00 max per accident, and $25,000 property damage limit

Periods 2 and 3: Liability coverage of $1 million per accident

Liability is for lawsuits against you resulting from injury or property damage that you caused someone else and nothing more. Your car will not be covered for repairs under this coverage. Both companies also include coverage for accidents in which you are hit by an uninsured or underinsured motorist, as well as contingent collision and comprehensive coverage. This contingent coverage only kicks in if you maintain collision and comprehensive coverage on your personal policy, and you are required to pay a deductible. Depending on your insurance provider, some policies, may allow a business use endorsement on a personal policy. This is often much more affordable than an outright commercial auto policy. In any case, it is important to be forthright with your car insurance agent so you know exactly what is and what is not covered by your own policy, and check your Employers policy. If you want complete peace of mind, a full commercial auto insurance policy may be the route to go to ensure you are covered no matter what. It's best to check all of your options so that you can make the wisest decision financially. Below are some examples of how your coverages may shift during a typical ride.

Your rideshare app is off

Your personal auto insurance policy applies. Any insurance provided through Uber or Lyft doesn’t apply during this time period.

When your app is on & waiting for a ride / delivery request

  • Liability
  • Comprehensive & collision coverage apply with the same deductible as your personal policy.
  • Uninsured/underinsured motorist (UM/UIM) coverage applies for the driver only.
  • Additional coverages: Roadside assistance, rental car reimbursement, and other coverages may apply if you have them on your policy. Medical payments and PIP coverage may apply as well, but only to the driver.

When you accept a request & pick up a rider or an order

  • Liability
  • Additional coverages: Roadside assistance, medical payments, rental car reimbursement, and other coverages may also apply during this time period if you have them on your policy.
  • Deductible reimbursement: Depending on your insurer, you may be reimbursed for the difference between the deductible on your policy and the deductible on any policy provided by the ridesharing company.

What if I’m at fault in an accident and my customers are injured?

Any liability coverage under a policy provided by the ridesharing company may cover injuries to your passengers up to that policy’s stated limits of liability.

What if I want to use my commercial vehicle for ridesharing?

If you drive a taxi, limousine, or any other vehicle used by a business to transport people for a fee, you typically need a commercial auto policy, or “livery insurance" and that is a different coverage than rideshare /delivery.

How to buy rideshare insurance

Rideshare insurance is either a hybrid policy or an add-on from your personal auto insurer, it is not a stand alone product. For example, you can’t have Progressive for your personal auto policy and buy rideshare insurance from Geico. When selecting rideshare insurance, be sure to: Tell your personal auto insurer you’re driving for a ridesharing company. Figure out the gaps between your personal policy and your rideshare company’s policy. Uber and Lyft both provide $1 million in liability coverage for drivers carrying passengers. Among smaller and newer companies, policies can vary. Ask your current insurer whether it offers rideshare insurance to fill in coverage gaps, or to quote you a commercial policy. If both types are available, get both quotes so you can compare costs.