According to a recent survey by nerdwallet.com, many drivers do not have enough auto insurance coverage to fully protect themselves, and they don’t fully understand the risks involved in what they are doing.
The area of rideshare insurance has been in a state of constant evolution over the past few years, as companies such as Lyft and Uber have become more and more popular. What most drivers need is a combination of personal and business insurance in order to fully cover all of the aspects of the job.
Depending on the insurance carrier, many don’t cover vehicles being used to transport passengers for a fee, and getting in an accident while transporting said passengers can result in cancelation of the insurance altogether.
What Rideshare Companies Provide
Rideshare companies provide limited coverage for drivers who are logged into the app waiting for a call. These limits are typically $50,000 per person for injuries, capped at $100,000 per accident, and $25,000 in property damage per accident. No coverage is provided for rideshare vehicles.
Uber and Lyft have at least $1 million per accident in liability, uninsured, and underinsured motorist coverage when the driver is responding to a call or transporting passengers. Limited collision and comprehensive coverage is provided to drivers who already have personal coverage on their vehicle. Rideshare insurance will only pay what the driver’s primary insurance will not.
Both Uber and Lyft have $1 million in coverage for passengers who are injured in an accident while riding in a rideshare car. If the damages exceed $1 million, the passenger must resort to taking either the rideshare driver or the rideshare company to court.
For rideshare drivers, there are typically three options that can be added to their policies:
- Rideshare-friendly policies, which do not add additional coverage but the insurer won’t cancel coverage for being a rideshare driver.
- Period 1 policies, which cover drivers when they aren’t on a call but are logged into the app waiting for one.
- Commercial rideshare policies, which provide coverage at all times and provide extra coverage in case an accident exceeds the limits of the rideshare company’s policy limits.
Fluid Coverage and Laws
According to Jason Hennessey, marketing director for Atlanta Car Accident Lawyer, “costs and coverage can vary greatly by driver, policy selected, carrier, and location of services. It is important for rideshare drivers to know what their policy covers and to stay current with the laws that apply within their city and state.”
As a consumer, it’s important to know what a particular rideshare company will and will not cover. For example, Uber has an arbitration agreement, requiring that all claims be handled on an individual basis. This prevents individuals from bringing any legal action against them. They also deny liability if a passenger is injured. Other rideshare companies are sure to have similar policies in place, so it’s important to be aware of these and to know your options should an accident arise.