Car Insurance for Rideshare and Delivery Drivers

Do I Need Rideshare Insurance?

Rideshare insurance—or a rideshare endorsement added to your personal auto insurance policy—provides coverage if you drive for a transportation network company (TNC) like Uber or Lyft, or a delivery service. Even if rideshare insurance is not required in your state, having the right coverage ensures you're protected in all driving situations.

Tip: Some insurers, like Progressive, require you to add rideshare insurance to your personal auto policy if you drive for a rideshare company.

You are legally required to have personal auto insurance in nearly every state, and your TNC will also require that you have insurance to be a rideshare driver. Most personal auto insurance policies exclude accident coverage when you're driving for commercial purposes.

The type and amount of insurance you need when driving for a rideshare company varies depending on whether you are logged in to the rideshare app, have accepted a ride or are transporting a passenger. When you are not signed in to the app and are driving for personal purposes, your personal auto insurance applies.

Tip: Rideshare coverage isn't available in all states; you may have to get a commercial policy instead.

How Rideshare Insurance Works

Once you log in to the rideshare app, there are three different phases of a ride with varying insurance coverage needs. Your TNC will provide varying coverage and amounts of insurance during each of the three phases:

In Phase 1, the app is on, but you haven't accepted a ride. During this period, the TNC provides limited liability coverage, though it doesn't provide full coverage for your vehicle or injuries you sustain. If you want more coverage, rideshare insurance can provide additional protection.

In Phases 2 and 3, when you've accepted a ride and you're either en route to a passenger or transporting a passenger, the TNC provides insurance coverage. This coverage may be subject to limits or have higher deductibles than your personal policy.

For delivery drivers, companies may provide liability insurance, but it may not cover damages to your vehicle. These variations in coverage and limits don't provide full protection in each situation. Rideshare insurance can help bridge gaps in coverage.

What Does Rideshare Insurance Cover?

Rideshare insurance fills in the gap between your personal auto insurance and the coverage provided by the rideshare company. This insurance typically offers:

• Liability protection, with higher liability limits than you receive from the TNC insurance.
• Collision and comprehensive coverage for damage to your vehicle, including repairs needed after an at-fault accident.
• Uninsured/underinsured motorist coverage, which protects you if another driver doesn't have insurance or enough insurance.
• Deductible reimbursement may be offered by some insurers. This reimburses you if your TNC's insurance deductible is higher than the deductible on your personal policy.

TNCs do provide some insurance coverage, but it depends on your status in the app:

• Waiting for a ride request: Some TNCs offer limited liability coverage when you're signed in to the app but not driving or picking up anyone. For example, coverage may include bodily injury coverage of $50,000 per person and $100,000 per accident, and property damage coverage of $25,000 per accident. (This doesn't cover damage to your vehicle.) Rideshare insurance can extend coverage during this phase of a trip.
• Picking up or transporting a passenger: The TNC provides higher liability coverage, often up to $1 million, when you or a customer are injured in a rideshare accident. Some TNCs also offer contingent collision and comprehensive coverage, provided you have personal collision and comprehensive coverage.
• Optional coverage: The TNC may offer coverage for disability payments, deductible-free medical expenses and survivor benefit payments.

Depending on the state, the TNC may provide additional coverage for you and passengers for certain situations:

• Hit-and-run accidents
• Accidents caused by an uninsured/underinsured driver
• Personal injury protection (PIP) for medical expenses and lost wages, regardless of fault
• Medical bills for the driver and passengers, regardless of fault

How Much Does Rideshare Insurance Cost?

Rideshare insurance cost varies depending on the insurance company, coverage amount and type of coverage.

You can expect premiums and deductibles to be 15% to 20% higher than personal auto insurance policies but cheaper than a full commercial auto policy.

Learn more: How to Make Money With Your Car

How to Get Rideshare Insurance

Having the right rideshare insurance is important for ensuring you're completely protected while driving for TNC or a delivery service. Here's how to find the right coverage.

1. Check with your current insurance provider. Before you start driving for a rideshare or delivery service, contact your current auto insurance provider about their coverage options and pricing. If you don't let your insurer know you're using your vehicle for rideshare, they could cancel your policy.
2. Determine the coverage you need. You may only need a rideshare endorsement, which is an add-on to your personal policy and covers you when the app is on but you haven't accepted a ride yet. A hybrid policy combines personal and rideshare insurance for seamless coverage. Finally, you may be required to have commercial auto insurance if you drive full time or you're licensed to operate commercial vehicles.
3. Get and compare insurance quotes. Get quotes from multiple providers to find the best coverage. Consider premium costs, deductibles, liability limits and comprehensive and collision coverage options.
4. Purchase and review your policy. Once you choose the best insurance, review your policy carefully to understand the terms. Make sure you know when rideshare coverage applies, what's covered and any exclusions.

Learn more: How to Get the Best Car Insurance

The Bottom Line

If you drive for a rideshare or delivery service, having the right rideshare insurance ensures you're adequately protected. It prevents coverage gaps, ensures you're compliant and protects you from thousands of dollars in out-of-pocket expenses if you're involved in an accident.

You can find the best rideshare insurance by shopping around. Experian's free auto insurance quote tool allows you to view quotes from top insurance companies in one place, making it easier to find the best coverage for the best price.