How Much Is Rideshare Insurance?

Rideshare insurance is exactly what it sounds like: a type of auto insurance that covers incidents that occur while you’re driving for a rideshare company like Uber or Lyft.

What’s the difference between personal auto insurance and rideshare insurance?

As a driver, you’re required to have personal auto insurance, which will kick in if you’re in an accident. It will cover damage to your own car, as well as your liability (your costs) if you damage another vehicle or injure someone and end up on the hook for their medical bills.

The key thing to understand is that most auto insurance policies do not cover commercial driving, which includes working for ridesharing apps, such as Uber. If you get into a fender bender while driving a passenger to their destination, your auto insurer probably won’t cover it.

Most driving-based gig apps offer at least some insurance, but what they provide often isn’t enough, and it won’t cover you all of the time. That’s why it’s generally a good idea to get a dedicated rideshare insurance policy to provide “gap protection,” supplementing the coverage provided by your personal auto insurance and the insurance provided by your rideshare company.

Most often, you can’t obtain rideshare insurance as a standalone policy. You’ll need to add it onto your current auto insurance. Add-ons like this are referred to as “riders.”

What does rideshare insurance cover?

Rideshare insurance policies provide several types of coverage:

• Property and bodily injury liability coverage: This provides protection for property damage or bodily harm you cause while operating your vehicle.
• Collision and comprehensive coverage: This covers damage to your vehicle caused by collisions and other accidents.
• Uninsured/underinsured motorist coverage: Bridges the gap if a motorist injures you or your passengers but lacks the insurance to cover the costs.
• Medical payments coverage: Covers you and your passengers’ medical expenses following an accident.

Although these categories have slightly intimidating, jargon-heavy names, there’s nothing unusual about them. These are essentially the same types of coverage that your personal auto insurance policy provides.

When does rideshare insurance cover you?

Again, rideshare insurance kicks in during the “gaps” in your ordinary coverage.

Legally speaking, as a rideshare driver, the time you spend behind the wheel can be broken into four periods:

• Period 0: This is when you’re driving your car, but haven’t signed into your rideshare app (i.e., you’re on an unrelated errand).
• Period 1: You’ve logged into the app, but haven’t accepted a ride yet.
• Period 2: You’ve accepted a ride and are on the way to the passenger’s pickup spot.
• Period 3: The passenger is in your car and you’re en route to the destination.

As you’d expect, during period 0, your personal auto insurance policy will cover you as normal.

During periods 2 and 3, both major ridesharing apps, Uber and Lyft, provide fairly comprehensive coverage, meaning you’re in decent shape even if you don’t have a dedicated rideshare insurance policy.

Period 1 is the tricky one. Currently, both Uber and Lyft provide some coverage during it, but it’s limited (meaning they’ll pay out less than if something goes wrong during period 2 or 3).

The table below breaks things down in more detail, listing both Uber and Lyft’s current policies when it comes to the four periods listed above.1 2

Uber and Lyft’s Default Insurance Coverage

As you can see, you’re reasonably well-covered when you’re actually on a job, but only lightly covered when you’re waiting for one to come in—unless you have rideshare insurance.

Rideshare insurance can vary significantly in cost. Sometimes, you can get it added to your policy for just $10–$20 more per month; other times, it might cost $70–$100 per month or even more.

There are several factors that affect how much you’ll have to pay:

• Your insurer: Insurance providers set their prices in different ways. State Farm, for instance, says that adding rideshare insurance to your policy will cost you about 15%–20% of your existing auto insurance premiums. Other companies may use different algorithms for calculating your rates. 3
• Demographics: As with your regular monthly premiums, how much you’ll have to pay for rideshare insurance will be affected by your age and (in some states) your gender. If you’re in a higher-risk, accident-prone demographic, you’ll have to pay more.
• Driving history: Similarly, your insurance rates depend on your driving record, including how long you’ve been driving and how many traffic violations or accidents you have on file.
• Location: Local and state insurance requirements, crime and accident rates, and cost of living (a proxy for repair costs) will all affect your premiums.
• Type of coverage: Basic coverage includes property and bodily liability protection. For a higher price, you can get comprehensive coverage, which provides broader protection and covers collisions, weather damage, and more.
• Type of vehicle: The age, make, and model of your vehicle may influence your insurance costs. Newer vehicles with top-of-the-line safety features may qualify for lower rates, whereas an older vehicle or luxury model will be more expensive to insure.

Because the price of rideshare insurance is so variable, your best bet is to call your insurer and ask how much it will cost, then spend some time shopping around before you commit.

No, having rideshare insurance usually isn’t legally required. However, insurance requirements are set by state law, not federal law, so you should check to make sure that’s the case in your state.

Why it’s still a good idea to get rideshare insurance

Even though you probably aren’t legally obligated to buy rideshare insurance, it’s still worth having.

That’s because the coverage that rideshare apps provide when you’re waiting for gigs (i.e., when you’re in period 1) is fairly minimal. It will cover the cost of everyday accidents, but not particularly bad ones, and if the worst happens, you don’t want to be on the hook for the full expense.

Eliminating dangerous edge cases

What’s more, having rideshare insurance eliminates “edge case” scenarios wherein your insurer and ridesharing company could both plausibly claim you’re not covered.

Imagine a scenario where you’re on your way to pick up a passenger and you rear-end somebody’s car. The ridesharing company claims that just before you were hit, the passenger canceled the ride, meaning their insurance didn’t cover the accident. Your primary insurer disputes this.

In that hypothetical, one of the two companies is probably obligated to cover you, at least in theory. However, actually holding them to that could turn into a headache.

If you have dedicated rideshare insurance, it becomes a lot harder for your provider to claim your incident doesn’t qualify for coverage.

Do you really have to tell your insurance company that you’re ridesharing?

If you’re wondering if you can just rely on your personal insurance policy and neglect to tell your insurer that you’re driving for Uber or Lyft at all, you aren’t alone. Many people have this idea—after all, nobody likes to pay for insurance that they don’t need.

Even setting aside the questionable ethics of lying to your insurer, this isn’t a good idea. Insurance providers know that many rideshare drivers are tempted to do this, so they’re vigilant about watching out for it.

If they catch you, they’ll probably cancel your insurance policy on the spot. What’s more, because insurers talk to each other, you may have trouble getting auto insurance in the future, and you’ll almost certainly have to pay more for it.

Unfortunately, there’s no way around the need to pay for insurance. It’s one of the costs of a ridesharing side hustle, along with fuel, vehicle maintenance, and taxes.

Getting rideshare insurance is simple. All you really have to do is call up your current auto insurance provider, tell them you’d like to start driving for Uber or Lyft, and let them walk you through the process.

However, if you want to get the best (and cheapest) rideshare insurance available, you’ll need to put in a little more legwork. This involves three steps:

1. Research and compare providers

The first step is to survey the market. Most major auto insurance providers offer rideshare insurance, including:

• Allstate
• Progressive
• Farmers
• State Farm
• USAA

Notably absent from that list is GEICO, who previously provided rideshare insurance but no longer does. If they’re your current insurer, you’ll need to switch providers to get covered.

You can get preliminary quotes from all of those companies on their websites. Write down the prices they offer and move on to the next step.

2. Call up and quiz insurance agents

Once you understand roughly what these companies offer, it’s time to speak with their agents. This is the best way to get a comprehensive explanation of what’s covered by their policies, including any limitations you need to know about. You may also find out about special discounts you’re eligible for.

When you call, ask specific and focused questions, such as:

• What types of coverage does this rideshare insurance include?
• Does this coverage have any exclusions or limitations?
• How is this coverage different from what my personal auto insurance provides?
• What will my deductibles and coverage limits be? (A deductible is the amount you have to pay yourself before your insurance kicks in.)
• Do you offer any discounts or incentives?

The answers you get from the different companies’ agents will probably be fairly similar; insurers are more alike than they are different, and they write their policies from the same templates.

If any company seems to offer spotty coverage, strike them off your list, but otherwise, you can go with whichever offers you the best deal in the end.

3. Review your policy’s terms and conditions

Lastly, once you actually receive your new rideshare insurance policy, take the time to review it, paying close attention to the fine print. Make sure you understand its limitations, exclusions, and conditions.

If there’s anything that seems odd or that doesn’t make sense to you (insurance policies are often written in jargon-heavy legalese), don’t be afraid to call your insurer back up and ask them to explain it. Thoroughly reviewing your policy will be a bit of a headache, but it’ll be worth it, particularly if you plan on pursuing ridesharing as a long-term side hustle.

Here are a few ways you can reduce your monthly rideshare insurance premiums (as well as the cost of your auto insurance in general):

• Increase your deductible: Again, a deductible is the amount you have to pay out of pocket when you file a claim. Choosing a higher deductible will lower your premiums. Of course, this also means you’ll have to pay more if you do get in an accident, so consider this carefully.
• Bundle your policies: Insurance companies frequently offer discounts to customers who bundle their auto insurance with other policies. If you have homeowners or renters insurance, for instance, your provider might provide rideshare insurance more cheaply.
• Look for discounts and incentives: Insurers also sometimes offer safe driver discounts to people with good driving records, loyalty discounts to long-term customers, or discounts for taking defensive driving courses.
• Practice safe driving: Insurance companies use lower premiums to incentivize safe driving, so keeping your driving record clean of accidents and traffic violations will help reduce your monthly costs.
• Maintain good credit: In many states, your credit affects how much you’ll pay for insurance. Take care to pay off your credit cards and your other debts in full and on time.

Don’t be afraid to shop around for new insurance regularly. You may get very different quotes from different insurers, particularly if you approach them after improving your credit score or making other substantial life changes. In many cases, being willing to switch providers is the key to getting a better deal.