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Colorado Insurance Blog

What Uber and Lyft Drivers Need to Know About Insurance

Driving for Uber or Lyft is a great way to make a little extra money. You can work when you feel like it and all you need is an okay driving record and an eligible car. Other than that, there aren’t many requirements.

Both Uber and Lyft do require that you have your own insurance on your vehicle. But many people don’t really know when their own auto policy stops covering them and when Uber or Lyft’s insurance starts covering them.

Generally speaking, as soon as you log into the Uber or Lyft app, your auto policy stops extending coverage.

Since you’re driving more than the average commuter, the risk associated with driving for a “Rideshare” company is greater. Because of that extra risk, most auto insurance policies exclude coverage for driving for hire.

Luckily, many insurance companies offer a Rideshare endorsement that you can add to the policy. In most cases, Rideshare coverage is inexpensive, and it covers a gap that would otherwise leave you exposed. If you don’t have the proper coverage you could be left without coverage if you get in an accident. Your personal auto policy may also be cancelled for violating the terms and conditions.

The best way to find out if your policy offers Rideshare coverage is to call your agent and ask. If that endorsement isn’t offered by your insurance carrier, it’s important that you find a policy that does offer it. We write with at least 5 different companies that offer Rideshare coverage, so give us a call if you need Rideshare coverage.

There are very specific guidelines on what coverage is provided when driving for a rideshare company. Whether you have the app on and are waiting for a fare, you’re driving to pick up your passenger, or you have your passenger in the vehicle, there are conditions in place to determine what coverage will extend.

The coverage that Uber or Lyft offers is fairly limited until you’ve accepted a fare and are going to pick up a passenger. Most Rideshare endorsements provide coverage while you’re logged into the app but haven’t accepted a fare. Since the coverage you have on your auto policy would extend during that period of time, it bridges the gap between your coverage and the coverage provided by Uber or Lyft.

Once you’ve accepted a fare and are on your way to pick up the passenger, your personal policy will no longer extend coverage. Even if you have the Rideshare endorsement. One reason for that is because once you have additional people in the vehicle, the liability risk is much greater.

Not to worry though, the coverage offered by Uber or Lyft increases once you have accepted a fare.

Please note that not all insurance policies are the same. The information provided is based on the insurance carriers that we are appointed with, but coverage may vary with other insurance carriers. If you have questions about the coverage on your policy, please call your agent.

Here is a breakdown of when your policy extends and when Uber or Lyft’s policy extends:

If you’re not logged into the app and are only using your car for personal use:

  • Your personal auto policy covers you
  • The Rideshare company’s policy does not extend

If you’re logged into the app, but haven’t accepted a fare:

  • The Rideshare company’s policy only offers Liability coverage if you’re at-fault in an accident.
  • Their policy doesn’t extend Comprehensive or Collision coverage for damage to your vehicle.
  • They also don’t provide Uninsured/Underinsured Motorist coverage if you’re injured in an accident.
  • The Liability limits they offer are very low:
    • $50,000/person for bodily injury
    • $100,000/accident for bodily injury
    • $25,000/accident for property damage
  • If you have a Rideshare endorsement, your personal auto policy will extend the same coverages and limits you have for personal use.

Once you’ve accepted a fare and are driving to pick up the passenger, and during the trip with the passenger:

  • Your personal auto policy will not extend coverage.
  • The Rideshare company’s insurance offers liability coverage, Uninsured/Underinsured Motorist coverage, and Comprehensive and Collision coverage.
  • The Liability limits offered during this period are $1 Million per occurrence, much higher than before you’ve accepted a fare.
  • Comprehensive and Collision coverage only extend if you have those coverages on your personal auto policy.
    • Lyft has a $2,500 deductible
    • Uber has a $1,000 deductible

The Uber and Lyft coverages listed above are based on the information from their websites as of 2/3/2021, please note that these coverages may change over time.

Find out more about Uber’s insurance policies here.

Find out more about Lyft’s insurance policies here.

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