Ride Sharing Service Insurance Guide

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We understand that as a driver for a ride-share app, you want insurance coverage that allows you to feel safe and comfortable on the road. Whether you’re waiting for your next passenger or you’re dropping someone off at their destination, it’s important that you know what coverage you have and what would happen if you got into an accident while working for a ride-share organization.

Although you may have standard car insurance, it’s important to review the gaps in your coverage and understand how your policy applies when you’re using a personal vehicle for business purposes. At American Auto Insurance, we’re here to help. We want you to feel confident that you’re protected on the job and can continue to work for a ride-share app, knowing you’re ready for any situation that might arise.

What Does Ride-Sharing Insurance Cover?

If you drive for a ride-share company like Uber or Lyft, you might already know standard driver’s insurance may not cover the use of your vehicle for these professional services like ride-sharing insurance does. This means that using your personal car, truck, or SUV while working for a ride-share company, also called a transportation network company (TNC), may leave a gap in your auto insurance coverage.

Popular ride-share apps offer drivers limited liability coverage, which can cover medical expenses and damage for other drivers involved in an accident if the incident was your fault. They may consider this business coverage applicable when drivers are on the way to pick up a passenger, or already have a passenger in the vehicle. However, there’s a high possibility that when you’re logged into a ride-share company’s mobile app, you will need an additional insurance plan to have protection and peace of mind.

Do You Need a Different Type of Policy for This?

Since you may not have auto insurance coverage when using your personal vehicle while driving for a ride-share app, you’ll likely need a different type of auto coverage policy. Some insurance agencies provide a ride-hailing insurance endorsement that you can add to your existing auto insurance policy to help fill the gaps in your coverage between your personal coverage and the policy a TNC provides. This means an add-on ride-sharing endorsement can also allow you to have coverage while you’re waiting for your next ride request.

It’s important to note that if you don’t already have collision coverage on your car insurance policy, you won’t have it on your ride-sharing endorsement coverage either. This also means if you don’t currently have comprehensive coverage on your personal policy, you won’t find it on your ride-sharing insurance endorsement. However, you can also opt for a full ride-sharing insurance policy, which allows you to combine your personal coverage and business-related auto insurance into one cohesive policy.

Are All Drivers Insured?

While ride-share apps typically require their drivers to have a personal auto insurance policy and provide them with limited liability coverage, there are often gaps in coverage that leave drivers uninsured for certain periods of time. This means that while all ride-share drivers usually have auto insurance, they may not have full coverage throughout the entire period they’re logged on to the ride-share app. As a result, they may encounter financial challenges because of this lack of coverage.

With ride-share insurance, you can feel confident that when you’re on the road waiting for a new passenger, on the way to pick someone up, or actively driving a passenger to their destination, you have the coverage and protection you need. This means that if you get into an accident while working for a ride-share app, not only is the passenger protected, but you and your personal vehicle have coverage as well.

What Happens if You Get Into an Accident While Driving for a Company?

If you get into an accident while driving for a ride-share company without ride-share insurance, you may have to pay out of pocket to cover your personal and medical expenses. Whether you’re interested in a full coverage policy or a ride-share insurance endorsement, additional coverage can help you avoid paying a TNCs high deductible. A deductible is what you pay toward a claim that your existing policy has covered. For example, when you have personal collision coverage and comprehensive coverage, you can often select your deductibles for these policies and choose a lower-cost option, like a $500 deductible. 

Instead, if you’re driving under the coverage of a TNC, you may have to pay their $1,500-$2,000 deductibles in the event of an accident. This means if you’re involved in a collision when you’re on your way to pick up a ride-share passenger or when you have a passenger in the car, you have to pay the TNC’s policy deductible out of pocket before you can access commercial insurance benefits to pay for damages to your vehicle.

How Much Does Ride-Share Insurance Cost?

The cost of your ride-share insurance depends on a variety of factors, including the type of coverage you want to buy. For example, a ride-share insurance endorsement may be more affordable than a distinct ride-share insurance policy that provides you coverage apart from your standard auto policy. Similar to other policies, the higher your limits, the more your ride-share coverage may cost. For example, if you plan to add on ride-share endorsement to your existing policy, the coverage limit might be the same as the limit on your personal auto coverage.

Why Choose American Auto Insurance?

At American Auto Insurance, we care about your needs and priorities and want to make sure that you feel comfortable as a driver for a ride-share app. Since these apps may offer varying degrees of liability coverage, and your personal car insurance policy may not provide you with full coverage when using your personal vehicle for business, we’re here to help you close the gaps in your coverage and get back on the road safely.

 Contact our team   of knowledgeable professionals at 800-483-4868 to  discuss your options and figure out what kind of coverage is right for your budget and lifestyle.

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