Rideshare insurance can be a confusing topic for drivers. Depending on where you live, how you drive and even how you purchase other types of insurance, your costs and experience can vary widely. In this article, RSG contributor Gabe Ets-Hokin answers all of your most frequently asked questions about rideshare insurance, including why you need it, how much it costs, and why not having it can cost more than having it.
Insurance: It’s one of those things that you hate paying for, but hate not having even more! When it comes to driving for Uber and Lyft, the companies provide coverage… sort of. Here’s my attempt to fill in some gaps in your knowledge of rideshare insurance.
Looking for more rideshare driver FAQs? Check out the following articles:
Do I Need Special Insurance for Rideshare? Don’t Uber and Lyft Provide It?
Back when rideshare was a new thing, insurance was a primary concern for new drivers. That’s because while the rideshare companies – Uber and Lyft – do provide coverage while you’re driving to pick up a passenger, or while you’re actually transporting them, you’re not covered for collision while driving around with the app on waiting for a trip. That coverage is provided by regular private-party insurance, and in those dark days, you could have your policy suspended if you reported you were an Uber or Lyft driver.
So yes, you need it, but good news: you can get what’s called a “rider” (and other things) through most insurance carriers now, and it’s pretty affordable in most cases.
How Much Does Rideshare Insurance Cost?
You have to shop around! It depends on where you drive and how much, but it can be as cheap as just $20 a month more than your regular policy, or even, in the case of GEICO’s policy for Lyft drivers, free if you do enough Lyft rides. It pays to shop around! You can take a look at all the options available in your state at our Rideshare Insurance Marketplace.
What does “Period 1,” etc. Mean?
To give us all context, the insurance carriers have named the different periods of rideshare driving. Period 1 is when you have your app on, but are just waiting for a trip. Period 2 is when you’ve received a trip, but the passenger is not yet in the car. Period 3 starts as soon as the passenger is in the car.
What’s a Deductible?
I’m glad you asked, as I’ve written a pretty lengthy piece about deductibles! The short answer is that it’s the portion of a claim that you, the claimant, have to pay. Think of it as a co-pay for a doctor visit.
How much will my deductible be?
The answer to this one depends on your coverage, your rideshare company and the type and severity of the incident. If you damage your car during an Uber trip (Period 2 or 3), and it’s your fault (or the fault of an uninsured driver), you’ll pay the first $1,000. If it’s a Lyft trip, you’ll pay $2,500, as pink office furniture must be special ordered and is expensive. If it’s another (insured) driver’s fault, you’ll (if everything goes right) pay nothing.
If the accident happens during Period 1 and you have a rideshare rider on your policy, you’ll pay the deductible you selected when you purchased your policy.
What Should I Do if I’m in an Accident?
The first thing you need to do is secure the scene: make sure nobody else will be hurt, and render appropriate first aid to anyone who needs it. Pro tip: show extreme concern for your passenger’s safety and well being, even if they are clearly uninjured. Showing them compassion, concern and putting their needs first will pay off big league; you want them on your side!
You should also download and keep this ‘what to do in case of an accident’ postcard in your glove compartment:
If there are no injuries, and the vehicles are mobile, video and photograph as much as you can and then show some professional courtesy to other road users and clear the road so traffic can flow! Prioritize getting the other driver’s info: license plate, driver’s license, registration and valid, current insurance card. If they don’t have insurance and ID, you should call the police if possible; it’s likely they will give you a fake name and number and disappear.
The other driver will want your insurance info. If the accident happened during Period 2 or 3, show them your Uber or Lyft insurance paperwork. Yes, you can get it from your app (by clicking “waybill”), but what if you’re out of cell range or your phone is damaged? Print copies of Uber and Lyft’s insurance cards and keep them in your glove box, alongside your car’s registration and your personal insurance.
While you’re still at the scene, use your phone’s voice memo function (or a pen and paper, if you can remember how to use them) to take notes. Find witnesses: as many as you can (and you do have a dashcam, right?), and be sure to get good contact info from them. Interview the other party and ask them what happened, but if they ask you what happened, you don’t have to (and really shouldn’t) tell them anything. Don’t be rude or brisk: just be vague. Tell them you’re still in shock and that “it all happened so fast,” my personal favorite.
Who Can I Call for Help?
If you’re injured or unfairly accused of being at fault, don’t worry: you’re not alone and there is help.
LegalRideshare is the only law firm in the United States entirely dedicated to Uber/Lyft accident and injury claims. LegalRideshare fights to recover costs of medical bills, lost wages and pain and suffering for injured Uber/Lyft drivers.
What if I’m Not at Fault? Do I Still Tell Uber or Lyft?
Not reporting an accident that happened while logged into the app – especially when a passenger is in the car, who will likely tell the rideshare company about the accident so they can get their money back – is a sure-fire way to get deactivated, maybe permanently, so don’t do it even if it wasn’t your fault.
But what if your app wasn’t on? You don’t need to tell them, but you do still have an obligation to report it to your insurance company and possibly to your state’s DMV.
If I Have an Incident While Driving for Lyft, Do I Have to Tell Uber or Vice-Versa?
There’s no need to bring in unrelated third parties. Even if you think it may have been your fault, you may not be officially found at fault. If you do tell the other company, you’ll be deactivated from both platforms while they “investigate”, and if they can’t get any info (as you weren’t driving for them and they can’t access info from your insurance company), that could take forever.
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Will I Be Deactivated if I Report a Claim?
Yes, you will, which is why you should always be active on both platforms. You can sign up with Uber here, and sign up with Lyft here. Driving for the company you don’t like sucks, but it sucks less than not working. You can limit your deactivation time by being proactive with all the documents, photos and reports the company will need to finish “investigating” your claim. In my experience, it takes about a week, and you’ll likely need a vehicle re-inspection if your vehicle is ready.
What’s the Best Rideshare Insurance Company?
What’s the best flavor of ice cream? This answer is going to depend on a lot of factors. For instance, if you ask me, I’ll tell you USAA, as I’m a veteran and get a great rate, but you may not be eligible. Also, Farmer’s may be cheaper in Texas than State Farm, but then State Farm may be cheaper than Farmer’s in Mississippi, and so on.
Illinois drivers – try OptOn for insurance! OptOn is a rideshare driver insurance app that you only pay for when you are actually using it. It’s easily one of the most flexible rideshare insurance policies that requires only four hours of commitment and charges cents per mile with three policy types (Primary, Preferred, and Premier).
Luckily, we here at RSG have been working really hard over the last five years and have a huge database of info on insurance at our Insurance Marketplace to get you started. Do your homework and be prepared to listen to lots of hold music and put the same information into online forms over and over, but at the end of the day you’ll likely save some money, which will reduce your hourly expenses – and raise your hourly pay!
Drivers, do you have rideshare insurance? If so, which rideshare insurance company are you with?
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-Gabe @ RSG