If I drive for Uber or Lyft, do I need different insurance?

A bit longer: When you drive for a ride-sharing service like Uber or Lyft, your personal auto policy will not cover you while you’re in service. In fact, if you don’t tell your insurer that you’re working for a ride-sharing service and they find out, they can cancel your policy. The service you drive for, be it Uber or Lyft, does provide you with insurance while you’re diving for them, but its coverage is very specific. Coverage from these policies is broken up by periods, explained below.

• Period 0 – Your app is turned off; you aren’t ride-sharing
• Period 1 – Your app is on but you are waiting for a ride request
• Period 2 – You’ve received and accepted a ride request
• Period 3 – You have picked up your passenger(s)

So, during Period 0, your app is off and you’re just driving regularly. During this period your personal auto insurance covers you, Uber or Lyft’s insurance has no influence or coverage at this time.

During Period 1 your app is on and you’re waiting for a request. At this time your personal car insurance will not be covering you, except in rare situations. Uber or Lyft’s insurance will step in and cover you once the app is on, but if it’s still in Period 1 your coverage from their policies is very limited and could leave you paying out a lot from your own pocket in the case of an accident. (Actual Numbers: coverage in this period offers liability only in the form of: $50,000 per person, $100,000 per incident, $25,000 property damage.)

In Period 2 you’ve now accepted a request but have not yet picked up any passengers. Once you’ve accepted a request in either app, a stronger insurance policy with more coverage than Period 1 comes into effect. This level of coverage continues through period 3, which includes the picking up and dropping off of your passenger(s). (Actual Numbers: coverage in these periods offers $1 million per incident in liability coverage, $1 million per incident in uninsured/underinsured motorist coverage, and a comprehensive/collision policy covering up to the value of your vehicle if you also have comprehensive/collision on your personal insurance.)

This is all to say that, if you’re driving for Uber or Lyft, you’ll probably want to get ride-share insurance. Ride-share insurance is a personal car insurance policy that will protect you during Period 0 and Period 1. This policy may also be required by your insurer once they are aware that you drive for a ride-sharing service. The availability of these policies is a bit tricky though, and depending on which state you live in, you may not have many options. The good news is that, for the most part, these policies can be as cheap as an extra $5-10 per month on top of your existing coverage. If ride-share insurance is completely unavailable in your state or location, you’re going to have to look at business insurance, which can get pricey. Either way, being without car insurance while you’re driving could lead to a lot of debt, so be sure you’re covered with some type of policy before you start ride-sharing.

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