Driving for Uber or Lyft can be a flexible way to earn money. But many new drivers do not realize their personal car insurance may not cover them while the app is on. That is where rideshare insurance comes in.
This guide explains how coverage works in each phase of a rideshare trip, where the gaps are, and how to protect yourself and your car.
Key takeaways
- Personal auto policies often exclude driving for hire, including time spent waiting for a ride request.
- Uber and Lyft provide coverage that changes depending on whether you are waiting, en route, or on a trip.
- The biggest gap is usually damage to your own car while you wait for a request.
- A rideshare endorsement or policy from your insurer can help close those gaps.
Why your personal policy may not be enough
Most personal auto policies are designed for personal use, like commuting and errands. Many exclude using your car to carry passengers or goods for a fee. If you get into an accident while working and your insurer finds out, it may deny the claim. In some cases, it could cancel or non-renew your policy.
That is why it is important to tell your insurer if you drive for a rideshare company. It may feel like it will raise your rate, but hiding it can cost far more if you ever need to file a claim.
The phases of rideshare driving
Rideshare coverage is usually explained in periods, based on what you are doing in the app.
- Period 0 – App off. You are not working. Your personal policy applies as usual.
- Period 1 – App on, waiting for a request. You are available but have not accepted a ride.
- Period 2 – En route to pick up a rider. You have accepted a request.
- Period 3 – On a trip. The rider is in your car.
Uber and Lyft provide different coverage in these phases.
What Uber and Lyft cover
Here is a summary based on the companies' own driver insurance pages. Coverage and limits can vary by state and market, so check the current details for where you drive.
| Phase | Liability from Uber or Lyft | Damage to your own car |
|---|---|---|
| App off | None. Your personal policy applies. | Your personal policy, if you carry collision and comprehensive |
| App on, waiting for a request | $50,000 per person and $100,000 per accident for injuries; $25,000 for property damage | Not provided by Uber or Lyft |
| En route or on a trip | At least $1,000,000 | Contingent coverage up to actual cash value with a $2,500 deductible, only if you carry collision and comprehensive on your personal policy |
Sources: Uber's driver insurance page and Lyft's driver insurance page.
A few important details from those pages:
- Uber says it provides no collision or comprehensive coverage for your car until you accept a trip. Depending on your state, it may also add uninsured or underinsured motorist coverage, personal injury protection, or medical payments coverage.
- Lyft notes that some markets have lower limits or no Lyft-procured policy. For example, Lyft lists lower waiting-period limits in Arizona and Nebraska, and it does not procure insurance for certain drivers in parts of New York.
Where the gaps are
Looking at the table, you can see the main risks for drivers:
- Your car while waiting for a request. Neither Uber nor Lyft covers damage to your own car during this phase. If your personal policy excludes rideshare driving, you may have no coverage for your car at all.
- Your car during a trip if you only carry liability. The rideshare companies' contingent coverage for your car generally only applies if your personal policy includes collision and comprehensive.
- The deductible. Even when contingent coverage applies, a $2,500 deductible can be a lot to pay out of pocket.
- Liability above the waiting-period limits. If you cause a serious crash while waiting for a request, damages could exceed the limits provided.
How rideshare insurance fills the gaps
Many insurers offer a rideshare endorsement that you add to your personal auto policy. Others offer a separate rideshare or hybrid policy. Depending on the insurer and state, this coverage may:
- Extend your personal coverage, including collision and comprehensive, into the waiting period.
- Help cover the gap between your personal deductible and the rideshare company's deductible.
- Keep your coverage simpler by having one insurer handle more of your claims.
Not every insurer offers rideshare coverage, and it is not available in every state. Coverage details differ a lot, so read the endorsement carefully.
Questions to ask your insurer
Before you start driving, or as soon as possible if you already are, ask:
- Does my current policy exclude rideshare driving?
- Do you offer a rideshare endorsement in my state?
- Which periods does it cover?
- Does it extend collision and comprehensive while I wait for requests?
- Does it help with the rideshare company's deductible?
- How would a claim work between you and the rideshare company?
Other coverage to consider
Rideshare driving also raises other questions:
- Medical coverage for you. Uber says optional injury protection for your own medical costs is available in most states for an additional cost. Your own health insurance, medical payments coverage, or PIP may also play a role.
- Uninsured motorist coverage. This can help if someone without enough insurance hits you. Learn more in our uninsured motorist coverage guide.
- Higher liability limits. Strong limits on your personal policy protect you when the app is off. See how much car insurance you need.
- Delivery driving. Food and package delivery apps may have different coverage rules than ride apps. Ask your insurer specifically about delivery work.
Tips for rideshare drivers
- Keep the app status accurate. Log off when you are done working so it is clear which coverage applies.
- Take photos after any incident and report it through the app and to your insurer.
- Keep records. Save trip details, screenshots, and correspondence.
- Review your policy each year. Your driving habits and the rideshare companies' coverage can change.
If you are ever in a crash, our step-by-step guide on what to do after a car accident can help you stay organized.
The bottom line
Rideshare insurance helps protect you during the periods when neither your personal policy nor the rideshare company fully covers you. The biggest risk is usually damage to your own car while you wait for a request. Telling your insurer you drive for Uber or Lyft and adding the right coverage may help you avoid a costly surprise.
Want to see which options are available where you live? Compare auto insurance quotes and connect with licensed agencies in our network that can talk through rideshare coverage with you.
This article is for general information only and isn't legal or insurance advice. Coverage and rules vary by state and insurer.
Frequently asked questions
The gap usually refers to the time you are logged into the app and waiting for a request. During this period, Uber and Lyft provide third-party liability coverage, but they do not provide collision or comprehensive coverage for your own car. If your personal policy excludes rideshare driving, damage to your car during this time may not be covered.
According to their driver insurance pages, both Uber and Lyft generally provide third-party liability of $50,000 per person and $100,000 per accident for injuries and $25,000 for property damage while you wait for a request, and at least $1,000,000 in liability once you are en route or on a trip. Limits can vary by state and market.
Costs vary by insurer, state, vehicle, and driving record. In many cases, a rideshare endorsement is added to a personal auto policy rather than requiring a separate commercial policy, which may keep costs more manageable. The only way to know your price is to get quotes and tell each insurer that you drive for a rideshare company.