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How Do Uber and Lyft Insurance Work?

  • Story Highlights:
  • Uber & Lyft Drivers Should Confirm Their Insurance Coverage
  • In Serious Accidents Basic Coverage Amounts Will Likely Fall Short
  • Drivers Should Investigate Supplemental & Contingent Coverage

If you are a rideshare driver, then it is important that you educate yourself on the kind of insurance you need because often, your standard and personal car insurance may not cover you while you are accepting fares.

Uber and Lyft are the two most popular rideshare service companies currently available, and they own and operate their own vehicles opposed to most taxi drivers that use a company car while working. Therefore, the drivers are independent contractors and are not hired directly by these companies.

If you drive for Uber or Lyft, you are required to maintain personal car insurance that meets or exceeds the state minimum coverage when it comes to liability. They are not required, however, to have commercial insurance.

Even with a personal insurance policy, it is important that you look through your policy carefully because most personal policies won’t cover you while you are driving on the clock. Take a look at the list of exclusions for your insurance policy to learn more about your coverage.

When the Driver is Not in Drive Mode

If the driver is operating their vehicle and they are not in what is called drive mode, then their personal car insurance policy should apply if they were to get into any kind of accident.

Logged into the App

These rideshare companies offer liability coverage for accidents that are determined to be the fault of the driver. However, it only covers the injured parties and any damage their property may have sustained. It would not cover the driver or the driver’s vehicle or injuries if they were to get into an accident.

The liability coverage offered through the company will pay up to $50,000 per person with a total of $100,000 liability for each accident. Property damage is covered at $25,000, but again, the driver is not covered under this liability coverage at all.

After the Driver Has Accepted a Ride Request

Once the driver has accepted a ride request, the company typically covers up to $1 million in liability coverage for the passenger of the driver that has caused the accident. But like the previous example, this coverage does nothing for the actual driver.

Supplemental Coverage

In some cases, you may find that your insurance company does cover ridesharing. In this case, any liability coverage Uber or Lyft offer will only be supplemental at this point, and your personal insurance will pay out before they do.

Thinking About Ridesharing?

While ridesharing seemed like a great opportunity to make some easy cash, there are several factors you need to consider before diving headfirst into your new career.

Yes, the companies offer a certain degree of liability coverage during specific scenarios, but none of this coverage will do anything if you sustain injuries or property damage as a result of the accident. Only your passengers will be covered in this case, so you will want to look at other options to protect yourself and your assets prior to becoming a rideshare driver.

Contingent Coverage

Contingent collision and comprehensive coverage are also offered through the companies as long as the driver maintains their own personal collision and comprehensive coverage on their vehicle. If this coverage is in place, then the company will pay for the damages done to the vehicle regardless of the initial cause of the accident.

In this case, you can receive actual cash value for the damaged vehicle, but you are also going to be subject to deductibles in this case which can vary depending on the company you are working with.

During his time as a public attorney for the State of Florida, Bernard Walsh developed a passion for defending the legal rights of Florida's citizens. Having seen many people being taken advantage of after being injured and the financial harm that can cause for families he committed himself fully to helping injured clients get justice, by fighting to make greedy insurance companies pay what they owe.

How Do Uber and Lyft Insurance Work?

Goldman Babboni Fernandez
Murphy & Walsh

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