No doubt about it, rideshare businesses are changing what transportation and other business models look like. It’s been a bit of a hit-and-miss phenomenon, a learning-as-we-go evolution as cities add regulations and the market responds that cause companies like Lyft and Uber to tweak how they do business.
One industry that rideshare businesses are having an affect on is auto insurance. A number of insurance providers have stepped up to provide rideshare insurance. Since rideshare drivers are independent contractors, they must by their own personal care insurance, and both Uber and Lyft require drivers to provide proof that they own a car insurance policy.
Uber and Lyft provide some coverage but it only kicks in if an accident occurs while a passenger is in the car. Otherwise, drivers are on their own. This is a gap a driver can cover with his or her own rideshare insurance policy. To be protected, drivers in states where rideshare insurance is not available purchase buy a commercial auto policy.
The two most common types of policies to consider as a rideshare driver are:
- Personal – A modified version that extends coverage to fill the gap left by Uber or Lyft policies.
- Commercial – Instead of a personal policy, a rideshare driver can purchase a modified commercial policy, which generally costs more than the personal
To see which insurance companies provide rideshare insurance, estimated costs and what states the coverage is available in go here.
If you want to drive for a rideshare company like Lyft or Uber, be upfront with your personal auto insurer. Some providers might cancel your policy if they find out you’re driving for a rideshare service, so you want to discuss your options right away.
Once you understand what gaps you’re facing with a rideshare company’s driver coverage, ask your current insurer if it offers ridesharing or commercial insurance that will fill the gaps.
To obtain rideshare insurance coverage, you’re required to buy it as an add-on to your personal insurance. If your current insurer doesn’t provide ridesharing insurance, shop around to find a company that does offer it and purchase both personal and rideshare coverage together.
Want to learn more about business use of cars and commercial coverage? Einsure can help. While you’re there you can use our free auto insurance online quote generator to compare quotes.