Am I covered by my auto insurance when I drive for Uber or Lyft?
Ridesharing apps like Lyft and Uber make it easy to earn additional income using an asset you already own – your personal vehicle. While you can earn money driving, it is essential to understand how your auto insurance is impacted by your rideshare activities and how you are covered in the event of an accident. While both Uber and Lyft require you to have car insurance, your personal coverage won’t cover any damages caused while you are working for one of these brands.
Personal Auto Insurance Doesn’t Apply for Lyft and Uber Work
Your car must be insured to be legally driven, but your personal policy will not cover your vehicle while you are using it for a commercial purpose. Since Uber or Lyft driving is considered commercial use, any claims that occur while you are working will be denied by your personal insurer.
Lyft and Uber Offer Insurance
Both Lyft and Uber offer internal insurance policies that cover you for the time you are working for them. This includes the times you are logged into the app, actively driving someone or traveling to a pickup point:
Logging in: When you log into an app to work, you are covered by both Uber or Lyft insurance. While liability amounts vary, the minimum coverage required by law in your state is most commonly used. Both bodily injury and property damage are covered.
Pickup: While you are on the way to pick someone up, the amount of coverage offered by Lyft and Uber increases dramatically, since you are actively working. Both apps offer $1 million in liability coverage and a minimum of $250,000 for injuries caused in this phase.
Actively driving: When a passenger is in your car, you are still insured at the higher rate, this is to protect both your passenger and anyone you injure in the course of your work for Uber.
What about your Vehicle?
Insurance coverage offered by Lyft or Uber is focused on liability, or the damage you cause to others. If you are actively driving or picking up a ride, then you are covered for your own vehicle as well, provided you have comprehensive personal coverage. If you do not have this coverage on your own, Uber or Lyft will not offer it either. This is optional coverage and strongly recommended if you want to make money with a rideshare app, because it ensures the app provider will cover your own car, too.If your auto insurer offers a rideshare endorsement, then this will help provide you with the coverage you need for your Uber or Lyft work – and prevent your policy from being canceled for commercial use.Both Uber and Lyft require you to file any claims with your own insurance company first (even though these claims will be denied), and then to their own internal coverage. The process may take longer than an accident while you are simply driving for personal reasons.Before you decide to drive for a rideshare brand, you should learn more about how coverage works and examine your own coverage levels to be sure your car is covered if you have an accident while working. If you do not have the right coverage, as described above, or don’t understand how coverage works, you could end up with a hefty repair bill and no assistance from either organization. Contact us to learn more about coverage or to determine what you need if you want to drive for Lyft or Uber; we are here to help.