Uber Car Insurance: What You Need to Know

by
Margaret Wack
Updated 
September 21, 2022
August 11, 2022
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You probably know that you need car insurance to drive in almost every state. But did you know that you might need additional insurance coverage if you drive for a rideshare app like Uber or Lyft?

Traditional car insurance policies only cover your personal vehicle use. And while rideshare apps offer their own coverage, those leave some gaps too. 

That means you might need extra coverage to stay protected the whole time you’re on the road.

Contents

What is rideshare insurance?

Rideshare insurance picks up where your other auto insurance leaves off, ensuring you have continuous coverage when you’re driving for work.

If you’re a rideshare driver, some insurance companies will even require you to get it.

How rideshare insurance works with your other car insurance policies

If you’re a rideshare driver, you’re already covered by two plans:

  • 📵 Your personal auto insurance
  • 📱 Your app-provided plans

But between these, you’re still left with some coverage gaps. These are times when, if you get into an accident, your insurance might not cover you all the way.

Specifically, these gaps happen when you:

  • Have the app open
  • Haven’t yet accepted a ride 

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Do Uber and Lyft drivers need rideshare insurance?

Depending on the state you live and drive in, rideshare insurance might not be legally required for you. But it’s still a good idea to get it. That’s because:

  • Your own personal auto policy won’t cover you if you get into an accident while driving for money
  • Insurance companies may even cancel your policy if they discover you driving for work without rideshare insurance coverage

What your existing car insurance policies cover

Every car insurance policy offers different types of coverage, for various situations. These can include causing an accident, getting into an accident caused by another driver, and getting your car stolen.

Here are your main coverage options:

  • 🚗 Liability insurance coverage: Covers injuries to other people — or damage to their property — from an accident you caused
  • 🚗 Under- or uninsured motorist (UIM) coverage: Covers your expenses if you get into an accident caused by a driver whose own auto insurance policy won’t pay for them
  • 🚙 Comprehensive coverage: Usually optional, this covers damage to your vehicle caused by something other than an accident — like theft, vandalism, or natural disasters
  • 🚙 Collision coverage: Usually optional, this covers damage to your own vehicle in the case of an accident

No matter what kind of car insurance policy you’re talking about, it’ll pull from these main options.

Now, let’s talk about exactly what your personal car insurance includes, and what your app-provided insurance covers. That way, we'll have a better understanding of the coverage gap.

What your personal car insurance covers

Personal auto insurance policies usually only cover your personal trips. That means you can’t have the Lyft or Uber app open when you’re driving

Your personal car insurance policy will include liability insurance coverage at the very least. 

Depending on where you live, it may also include UIM.

Comprehensive and collision coverage are usually optional — and cost extra.

What Uber- and Lyft-provided insurance cover

Lyft, Uber, and other rideshare companies provide their own insurance to drivers. But the coverage they offer isn't complete. It's best once you’ve accepted a ride and are either on your way to the passenger or driving with them in the car.

Insurers who deal with Lyft and Uber drivers typically split coverage into three different “periods.” These are based on where you are in the driving process:

  • 📱 Period 1: When the app is on and you’re waiting for a ride
  • 🛣️ Period 2: When you’re on your way to pick up a passenger
  • 🤝 Period 3: When you’re driving with a passenger

Here’s how your app-provided insurance breaks down for the different periods:

Period 1: When the app is on but you haven't gotten a ride request

Uber- and Lyft-provided plans both provide some liability insurance during this period. This kicks in if you’re deemed to be at fault for an accident, and it covers up to:

  • ✅ $50,000 in bodily injury per person involved
  • ✅ $100,000 in bodily injury, total, for the whole accident
  • ✅ $25,000 in property damage for the action

Here’s what doesn’t offer:

  • ❌ Under- and uninsured motorist coverage
  • ❌ Collision coverage
  • ❌ Comprehensive cover

If you get into an accident during this period, you’d be on your own for some expenses. That includes fixing damage to your own car, and treating injuries caused by an underinsured driver — someone whose own policy won’t cover your medical bills.

Periods 2 & 3: When you’re picking up a passenger — or driving with one

Once a rider is involved, Uber- and Lyft-provided plans will offer more protection. Interestingly, their coverage depends on what options you have on your personal auto insurance.

An app-provided plan will always include:

  • ✅ Up to ​​$1,000,000 in liability
  • ✅ Under- or uninsured motorist coverage

They’ll also include the following if you have them on your personal car insurance plan:

  • ☑️ Collision coverage
  • ☑️ Comprehensive coverage

As you can see, the insurance Uber and Lyft provide will cover you pretty well if you have a passenger in your car — or are on your way to pick one up. Before you book your first ride, though, it’s much more limited. That’s when a dedicated rideshare insurance policy would help you cover the gaps.

What rideshare insurance covers

Rideshare insurance fills in the gaps left by your personal auto insurance and coverage provided by gig apps. This kind of specialized coverage is especially important during period 1, when you're:

  • 📱 Have the app open
  • ⏳ Haven’t yet gotten a rider

What can happen if you don’t have rideshare insurance

For example, say Suzanne is an Uber driver who doesn’t have dedicated rideshare coverage. She gets in her car, enters the app, and starts looking for rides while heading downtown.

Before she accepts a ride, however, she gets into a car accident with another car.

Without rideshare insurance, Suzanne has:

  • ❌ No coverage from her personal policy
  • 〰️ Only liability coverage from her app-provided insurance

Suzanne doesn’t have collision coverage to fix her own car. Her liability insurance would only pay for the other driver’s car to be fixed — and that’s assuming Suzanne was at fault for the crash.

If the other driver is uninsured, Suzanne won’t be eligible for the uninsured motorist coverage that would take care of her medical expenses.

On the other hand, if Suzanne had rideshare insurance coverage, she’d be fully covered for this accident.

How much does Uber insurance cover?

Rideshare insurance usually costs about $10 to $30. It’s an add-on to an existing personal auto insurance policy — not a stand-alone policy. 

Good news: The cost of rideshare insurance counts as a business expense for gig drivers. That means you can write off the add-on payment when you file your taxes, whether ridesharing is a part-time side hustle or your full-time job.

These days, Keeper Tax makes it easier than ever for independent contractors like Uber drivers to keep track of business expenses — like rideshare insurance.

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The app will automatically scan your accounts for car-related purchases. Just download it, answer a few questions, and link your accounts to start tracking eligible tax write-offs!

How to find the right Uber insurance policy in 5 steps

There are a few things that you should keep in mind when shopping for rideshare insurance. These include:

1. Make sure your insurer offers rideshare insurance

It sounds simple enough. But the first step when looking for the right policy is making sure that the companies you’re considering even offer rideshare insurance.

Rideshare insurance is an add-on. So the easiest way to do this is to check if your current insurance company offers that add-on.

If it doesn’t, you’ll have to switch to a completely different provider for your personal insurance too.

Luckily, many of the big insurance providers offer rideshare add-ons, including:

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2. Compare quotes from multiple insurance companies

The best way to ensure you’re getting a good deal on car insurance? Shop around.

You can do this by either:

  • 💻 Applying for quotes from multiple different insurance companies online
  • 📊 Using a third-party service that aggregates personalized quotes

Why you need personalized quotes to choose the best plan

Car insurance costs can vary dramatically depending on:

  • 🏎️ The type of car you drive
  • 📍 Where you live
  • 🛣️ Your driving history
  • 💳 Personal factors like your age, gender, and credit score

That’s why personalized quotes are the only way to accurately compare policies and make sure that you’re getting the best deal possible.

3. Check if you’re comparing apples to apples

When you compare policy offerings from different insurance providers, make sure that they have the same coverage types and amounts. 

What type of coverage — and how much coverage — you purchase can affect the price of your insurance policy.

A plan with no collision coverage option would be cheaper than one that offers it. But that doesn’t mean the less expensive plan is the best option for you. You might decide the extra protection is worth paying for.

4. Hunt for discounts

Some insurance companies offer discounts for customers.

One of the most common discounts is for customers who bundle their auto insurance ​with other types of policies — for instance, homeowners insurance or renters insurance.

Insurers may also offer discounts for things like:

  • 🛡️ A history of safe driving
  • 😌 A period without claims
  • 🗓️ Paying annually (or every six months) rather than monthly

5. Do your due diligence on the insurer

Before you commit to a plan, dig into the insurance company’s:

  • 💰 Financial stability: To make sure they can pay you out if you need to file a claim
  • 🏆 Customer satisfaction scores: To check if they have a history of dealing with customer claims helpfully and efficiently

At the end of the day, rideshare insurance typically isn’t that expensive. And it can save you a lot of money if you get into an accident that isn’t covered by either your personal auto insurance policy or your app-based insurance coverage.

Margaret Wack

Margaret Wack

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Margaret Wack is a freelance writer and poet. She’s covered topics including personal finance, insurance, small business and entrepreneurship, loose leaf tea, travel, and more for sites like US News & World Report, Investopedia, MoneyGeek, Money Under 30, Angi, Insurify, and ArtfulTea. When she’s not writing for work or pleasure, she’s usually curled up with a cup of tea and a good book.

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