Can I Get Disability Insurance if I’m Self-Employed in New York?

If you are an independent For Hire Vehicle (FHV) driver in New York dispatched by a Black Car Member Base (including Uber or Lyft), you may be eligible for two types of Disability Insurance at no cost to you!  Check out The Black Car Fund (BCF) Drivers Benefits program here.

This article is sponsored by the Black Car Fund, but all opinions are, as always, our own.

What is Disability Insurance?

Disability insurance helps provide income replacement benefits if a person becomes disabled and is unable to work. Disability insurance plans vary based on insurance provider and policy type.  For instance, some policies respond to accidents and injuries incurred on the job (i.e., Workers Compensation), while others only apply off the job (i.e., Non-Work Accident Disability) and some, to both.  

Can Self-Employed Workers Get Workers Compensation Insurance?

Workers’ Compensation Insurance is a form of Disability Insurance that helps provide income protection to workers in the event of accidental injuries incurred while on the job.  

Workers’ Compensation Insurance is usually paid for by employers (by government mandate) to ensure that employees that are disabled due to a work-related injury will be compensated for lost wages and provided necessary medical treatment to return them to the workforce.  This mandate typically applies only to traditional employers, so self-employed individuals do not generally have this protection unless they purchase it on their own.

What do NY Rideshare Drivers Need to Know About Disability Insurance?

Workers Compensation for on-the-job, disabling, accidental injuries

By special Statute signed into NY law back in 1999 and just recently extended by a unanimous Extender Bill passed late last year, NY Rideshare Drivers automatically receive Workers’ Compensation Insurance paid for by The Black Car Fund.   

This means self-employed NY FHV drivers automatically have coverage for lost wages and medical expenses if they suffer a disabling injury on-the-job while being dispatched by a Black Car Fund Member Base (which includes Uber and Lyft). 

New in 2022 and Beyond

Starting November 1, 2022, The Black Car Fund expanded the benefits available under its Drivers Benefits program to also include a Non-Work Accident Disability Insurance Plan at no cost to eligible, enrolled drivers! 

Non-Work Accident Disability Insurance Plan helps provide coverage for disabling, accidental injuries incurred outside of work

The Non-Work Accident Disability Insurance (ADI) Plan provides eligible, enrolled drivers with monthly payments in the event of Disability caused by a covered accident while NOT working – whether at home, at play, or even between fares.

This ADI Plan pays a Monthly Benefit Amount of up to 70% of the insured driver’s pre-disability net driving income up to $1,500 per month, subject to $500 per month minimum monthly benefit, to be paid after a 30-day elimination period, for the length of the Disability up to 1 year.

You can review the ADI Certificate of Insurance here for complete information about the Plan (including exclusions, limitations, and terms and conditions of coverage).

(Note: This benefit is distinct from the Workers’ Compensation benefit provided by The Black Car Fund, which provides wage replacement and medical benefits to Covered Drivers if injured on the job and can also cover medical expenses, hospital fees, and medication costs related to an injury.)

Most importantly, please be aware that you must be enrolled in The Black Car Fund Drivers Benefits program to access the non-work Accident Disability benefit. Make sure you’re prepared because, if you do happen to experience a disabling injury outside of work, but are NOT enrolled in Drivers Benefits at the time it occurs, then you will not have this coverage.  

There is no downside to joining Drivers Benefits; all you need to do is enroll to get access to this and many other valuable benefits (like telemedicine, vision and dental coverage).  You can learn more and enroll for free, here!

For eligibility requirements and a complete description of Drivers Benefits available at no cost to eligible drivers, visit The Black Car Fund Drivers Benefits website

Other FAQs

What is The Black Car Fund & Why Do Eligible NY Rideshare Drivers Get Drivers Benefits at No Cost to Them?

The Black Car Fund is a non-profit organization created by New York State to protect New York’s for-hire vehicle drivers and their passengers. The Black Car Fund administers safety and health programs that benefit for-hire drivers, their passengers, and other New Yorkers on the road. Two of the organization’s most popular programs are the Drivers Benefits program and Workers’ Compensation Insurance.

These programs are funded by the Black Car Fund passenger surcharge added to New York passengers’ fares. The passenger pays the surcharge as a part of their full fare and goes directly to funding valuable benefits for eligible drivers.

For eligibility requirements and a complete description of benefits available to at no cost to eligible drivers, visit The Black Car Fund Drivers Benefits website

Can Other Self-Employed Workers (who are NOT Eligible NY Rideshare Drivers) Get Disability Insurance? How Much Does It Cost?

Yes, you can get disability insurance if you are self-employed. The requirements to qualify and cost will vary by insurance company and the amount of coverage you need. 

In most cases, insurance carriers charge the policyholder a percentage of their expected annual salary. Self-employed workers can roughly expect to pay anywhere from 1% to 3% or even 4% of their annual yearly salary as their disability insurance coverage premium, if they elect to purchase this coverage for themselves.  

How Much Income Do Disability Insurance Plans Cover?

This type of insurance rarely replaces all your income if you become disabled, but it does help provide wage replacement benefits up to a certain percentage of a policyholder’s earnings while unable to work.  

These policies typically pay somewhere between 60% to 70% of your monthly income for a predetermined amount of time while you are disabled (based on your policy’s coverage terms and limits).  

But, lucky for you, The Black Car Fund Workers Compensation Insurance and Accident Disability Insurance Plan is made available at no cost to eligible, enrolled NY Rideshare and Black Car drivers who drive for Black Car Member Bases (including Uber and Lyft). 

Is Disability Insurance Worth It?

If you are a NY Rideshare driver eligible for The Black Car Fund Workers Compensation and Accident Disability benefits, it is worth it. There is no cost to eligible drivers for these benefits because they are paid for through the surcharge paid by passengers on every ride, which makes up The Black Car Fund.  

You just have to make sure you are enrolled in Drivers Benefits, for free, to receive access to Disability Insurance and a host of other health and wellness benefits. Learn more and enroll here!

For other self-employed workers, it all depends on your family’s financial situation. If you are the primary source of income for your family, you may find that having disability insurance makes good sense.

If you are not the primary source of income, losing your income may matter less to your family financially, but if you rely on both incomes, it would be wise to have just in case.

Also, if you already have an established emergency fund in place, you might do better by continuing to add money to it rather than pay for something like short-term disability insurance since you already have a way to cover your weekly and monthly expenses for a short period of time.  

Since emergency funds won’t last forever, if you’re unable to work for a longer period of time, you might find that purchasing a long-term disability insurance policy can keep at least some portion of your income coming in for as long as you have your disability. Some people find this reassuring because it gives them peace of mind in knowing they will have some money coming in to help pay their bills if they need it.

What about Social Security Disability insurance? Won’t it Cover Me?

The short answer is that if you pay your self-employment taxes, you can receive Social Security disability benefits. The problem is that some self-employed people claim so many business deductions on their income tax forms each year; they do not show any profit. Using this strategy can save you a lot of money on paying self-employment and income taxes, but it also means you are not paying into the Social Security Administration (SSA) system, so you don’t accumulate enough work credits to qualify for Social Security disability insurance (SSDI) benefits.

What is the difference between short-term and long-term disability?

As the name suggests, short-term disability insurance typically covers you for a short period of time while you recover from your accident. Coverage usually lasts somewhere between three to six months. 

Long-term disability covers you from when your accident occurs and the policy remains in place until you reach retirement age. 

However, it is important to note that short-term disability insurance pays out in about two weeks, while long-term disability doesn’t normally start paying out until around 90 days. This difference in time can pose a serious problem if you don’t have enough money to pay your bills and the bill collector comes knocking on your door.

You will want to review the coverage details of the specific plan you are considering for information on when benefits would start/waiting or elimination periods, the length of time coverage can remain in effect, and all other coverage terms, conditions, limitations, and exclusions. 

Will I need a medical exam to get coverage?

No exams are required to qualify for coverage if you are eligible for The Black Car Fund Drivers Benefits program.  Otherwise, this is definitely a possibility. It all depends on your carrier. If you have known health issues, you could end up with limitations or even exclusions to your policy coverage.

What Does it Mean to be Self-Employed?

In its simplest terms, being self-employed means you work for yourself and do not have an employer. Instead, someone who is self-employed may work for a variety of clients, and each job they perform is different, or they may run a business where they provide the same service over and over again to their regular customers.   

Uber, Lyft, DoorDash, and other gig workers are considered self-employed or “independent contractors,” meaning they are on their own regarding paid time off, disability insurance, sick leave, and even doing their own taxes

Final Thoughts

Disability Insurance Plans can be a great help should you experience a disabling injury that prevents you from working. Of course, we all hope that this will never happen, but having this type of insurance can not only provide you with peace of mind, but also can help protect your income in case you do need to use it.

And most importantly, if you are an eligible NY FHV driver, then you can have Workers’ Compensation Insurance as well as an Accident Disability Insurance Plan at no cost to you simply by enrolling in Drivers Benefits from The Black Car Fund.

Remember, you will not be covered if you are in an accident today and are not enrolled. To be prepared, enroll in Drivers Benefits now, for free. If you are an eligible New York FHV driver, you’ve earned this – so activate your account today.

Learn more about NY Black Car Fund and Driver Benefits here.

-Kate @ RSG