Filling in Rideshare Gaps

Ridesharing is a service in which someone uses his or her vehicle to drive passengers or property for a fee on behalf of Transportation Network Companies, like Uber or Lyft. Regardless who you are driving for, if you’re using your Camry to deliver people to and from locations in exchange for money, your normal insurance policy will not provide you coverage while you’re working. To be sure you’re covered, you will need a specialized insurance policy geared towards ridesharing. This insurance policy provides coverage while driving for any Transportation Network Company while the App is turned on even if a rider has not been accepted.

Who is ridesharing insurance for?  You need rideshare insurance if you drive for a ridesharing or on-demand delivery company, such as:

• Uber
• Lyft
• Amazon Flex
• DoorDash
• Grubhub
• Instacart
• Postmates
• Uber Eats

You’re not limited to one company. You can drive for several.

How does ridesharing work?

Period 1- App on
While waiting for a ride request

This period of time is often known as the “coverage gap.”  It’s any time when you have turned the app on but aren’t in the process of picking up a passenger or transporting them.  During this time, you are the most vulnerable when it comes to insurance.  Your personal auto insurance will not cover you; by their definition, you are using your car as a commercial vehicle, so your personal policy does not apply.  Although rideshare companies will cover you as soon as you log in to their app, it’s for a small amount of liability only. That means you’ll be covered at the state minimum or more for any injuries and damages you cause while the app is active and you’re waiting for a passenger.  Coverage includes your liability to pay another person’s medical bills or to pay for property damage (like a damaged car or fence). It does not cover the Uber/Lyft driver’s own car accident injuries or vehicle damage.

Coverage Limits vary by state, but are at least:

• $50,000 per person/$100,000 per accident for bodily injury
• $25,000 per accident for property damage

If you are not at fault, you may make a claim against their insurance. Your personal insurance policy may also cover you in this situation. Please check your personal coverage for more information.

Period 2- Ride request accepted
On your way to pick up a rider

When you drive to pick up a rider after accepting a request, you are insured for the following in case of a covered accident:

1. Third party liability coverage

Insures bodily injuries or damages you’ve caused to your riders, people in other vehicles, pedestrians, or property. Coverage limits vary by state but are at least $1,000,000.  This liability coverage won’t cover injuries and vehicle damage sustained by the Uber/Lyft driver, and once the accepted trip/ride is over, so is the $1 million liability protection, until the driver accepts another trip/ride via the app.

2. Uninsured or underinsured motorist bodily injury coverage

This insurance covers you and anyone else in your vehicle in case of an accident where another driver is at fault, but does not have sufficient insurance. This also covers hit-and-run accidents where the at-fault driver cannot be identified. Coverage limits vary by state, but are at least $250,000 per accident up to $1 million.

3. Contingent collision and comprehensive coverage

As long as you maintain comprehensive and collision coverage on your personal auto insurance, Uber/Lyft insurance will kick in and provide physical damage coverage for your car up to its actual cash value, regardless of who is at fault.

There is a $1,000 deductible with Uber and a $2,500 deductible with Lyft that you must pay first before this coverage applies.

Period 3 – Transporting your passenger
When you have picked up the passenger and during the trip

Same coverage applies as during period 2. While you’re driving your passenger to their destination, both Uber and Lyft insurance provide liability, uninsured/underinsured motorist, plus comprehensive and collision coverages.

When is your car not covered by a rideshare service?

With any rideshare insurance policy, you’ll likely have no coverage for damage to your vehicle in two instances:

• The period between signing into the app and matching with a passenger
• The period after you’ve dropped off a passenger but you’re still logged in and are waiting to match with another passenger

That means if you’re in an auto accident with an object, vehicle or animal, or if your car was stolen or vandalized during one of those instances, your rideshare policy won’t cover physical damage to your vehicle.

App off – Not in so-called “driver mode”

When the driver is in his/her vehicle but is not logged into the Uber/Lyft app then the driver’s own personal car insurance coverage will apply to any accident that occurs, and Uber’s/Lyft’s insurance coverage will play no role.

If you don’t have rideshare insurance, you run the risk of:

• Losing your personal auto coverage
• Falling into coverage gaps for accidents that occur while you’re ridesharing or driving for on-demand deliveries
• Paying out of pocket for repairs, injuries, and more

Why risk it? Alliance West Rideshare Insurance covers you all the time, so you can focus on making money, not worry about losing it.  Basically, these insurance policies will cover the driver on a personal auto policy whenever the Ride Sharing Companies’ insurance does not cover them. As you can see, those policies will only cover their drivers once they are on the app and accept a ride.