On RSG, we are big proponents of making sure you’re covered with specific rideshare endorsements on top of your auto insurance. There are plenty of reasons to get additional rideshare coverage, but one question I get a lot is: how much will rideshare insurance cost? Today, RSG contributor Melissa Berry outlines how she actually ended up saving money by adding rideshare insurance to her policy.
For rideshare drivers, our car is our greatest asset. Without it, we’re not a rideshare driver, we’re just wannabe rideshare drivers. However, even if you have a car, you can’t drive with Uber or Lyft without car insurance.
If you haven’t looked into your current auto insurance policy, or if you’re shopping around right now, you may be able to save money by switching to a policy with a rideshare endorsement. Yes, by adding coverage, you could lower your car insurance bill.
My auto insurance bill previously was around $115 a month. By following the tips outlined below, I shopped around, found an excellent auto insurance company, and reduced my auto insurance bill to $67 a month. Today, I’ll guide you through the steps I took along with some recommendations on how you can lower your auto insurance costs while adding a rideshare endorsement.
Make Sure Your Auto Insurer Offers Rideshare Insurance
The first thing I did was head over to the RSG Insurance Marketplace, which lists auto insurance companies and agents by state. These companies and agents also offer rideshare insurance – we verify with them. This saves you time, as RSG has already done the work to find companies and agents in your state that definitely offer rideshare insurance.
Does your state have multiple companies and agents, as mine did? Great – time to shop around! Call several companies (or agents, if agents are listed), give them your basic information and let them know you want to drive for rideshare, then get quotes and compare them.
Make sure you’re comparing apples to apples. Every state is a little different, but you’ll have to at least have your state’s minimum required coverage. In Arizona, we are required to carry insurance that meets the following:
- Bodily Injury Liability: $15,000 per person / $30,000 per accident
- Property Damage Liability: Minimum $10,000
Quick note: verify what your state’s mandatory coverage is by going to your state’s Motor Vehicle Department’s website. When I searched “Arizona Minimum Car Insurance Requirements”, one of the sites that popped up had the wrong information. You’ll find the correct information by going to your state’s DMV site.
Your state may have different requirements for insurance, and it’s important to compare policies by these numbers. For example, let’s say you compare three policies:
- Policy One has coverage for: $15,000 person/$30,000 accident (bodily injury) and $10,000 property damage. Total: $50 per month
- Policy Two has coverage for $50,000 person/$75,000 accident (bodily injury) and $10,000 property damage. Total: $75 per month
- Policy Three has coverage for $15,000 person/$30,000 accident (bodily injury) and $50,000 property damage. Total: $55 per month
A $5 difference a month between policies three and one is almost a no-brainer – for $5 extra a month, you get $50,000 in property damage vs. $10,000. But what about Policy Two, which costs more but covers more?
This is where it starts to come down to price and your tolerance for risk and ability to pay if you get into or cause an accident. Personally, the extremely low coverage Arizona requires seems dangerous to me. Going to the emergency room just for a band aid practically costs $10,000, so Bodily Injury Liability of $15,000 wouldn’t cover very much.
My recommendation is always get the best coverage you can afford – which is why I went pretty high for my coverage (below).
In addition, make sure you don’t choose the cheapest policy without checking to see what it covers. You may expect glass coverage from your auto insurance, but the cheaper policy might not offer that. Make sure to read through what each policy covers if you have multiple options.
Keep a Clean Driving Record
This is pretty important: you’re much likely to get a lower rate on your auto insurance if you haven’t been involved in any accidents or made any claims. If it’s been a few years since an accident, shop around and see if you can get a cheaper rate.
If it was a recent accident, you may have a tougher time getting the cheapest policy. However, eventually with several years of accident-free or claim-free driving, you’ll be able to lower your auto insurance costs.
Bundle Your Coverage
All those commercials aren’t wrong – you really can save money by bundling your home and auto insurance. This also counts for renter’s insurance, so if you own your home or are renting, bundle your insurance with your auto to get a lower rate on your auto insurance.
In addition, if you have a spouse or driving-age child, consider insuring multiple cars at once. Many if not all insurance companies will offer a discount for the more cars you insure. The one caveat? Teenagers! Your auto insurance rate will be higher if you have teen drivers on your policy, just by nature of them being teenagers.
Another tip I didn’t know about until I shopped around? Ask to receive your documents online! Some auto insurance companies actually charge to mail you your insurance documents or bills, so ask and see if you can get a discount for doing everything online.
Consider Skipping Roadside and Rental Car Coverage
If you can remove the roadside and rental car protections from your auto insurance policy, you could save some money. You may already be covered by roadside assistance through something else, like AAA.
In addition, if you use credit cards to rent cars, your credit card may already offer rental car coverage or protection. Carefully go through any benefits you get with your credit card or professional memberships you may have outside of rideshare driving, and consider removing roadside and rental car coverage from your auto insurance.
For our recommendations on the best credit cards for rideshare drivers, check out our Credit Cards page here.
One quick note about rental car insurance: if you want the ability to get a rental car if you’re in an accident, make sure your insurance policy covers rental cars in the case of an accident. This will cost you extra, but you will at least be reimbursed for a car to use while yours is being repaired.
That rental coverage is different from you choosing to rent a car for vacation. Your insurance agent will be able to explain the difference in coverage to you, and then you can make the decision based on your preferences, budget, and other coverage you might already have.
Use Your Connections
Teachers and military members may be eligible for discounts from many auto insurance companies. Any professional organizations or even college/university alum status may make you eligible for a discount. Try it all!
Avoid Lapses in Coverage
As much as possible, try to avoid not having auto insurance. If you’ve been rideshare driving for a while and/or always owned a car (and had insurance), this wouldn’t really apply to you, but it does make a difference for auto insurance costs.
As the car site Edmunds recommends, “even a brief lapse in coverage can disqualify you from receiving discounts.” This includes switching between insurance companies too – make sure you’re covered by your old insurance until your new insurance takes effect so you don’t look as lapsed.
Pay 6 Months to a Year Ahead, If Possible
In almost all cases, it makes sense to pay your auto insurance bill every 6 or 12 months, not monthly. Usually you will pay more for the convenience of monthly bill-pay, so to avoid these extra costs, request to be billed every 6 or 12 months. You can also ask for auto-billing to save more.
It can be difficult to pay 6 or 12 months up front, but one strategy is to save up your monthly auto insurance amount every month ahead of time, then have that money in savings when it’s time to pay for the 6 or 12 month premium.
Buy a Safer Car
In general, the newer the car, the safer it is, as many new cars come with more safety features as standard than older cars. Make sure your car has safety features like airbags, anti-lock brakes, forward-collision warning, or even an automatic braking system.
Your auto insurance agent will ask you the age, make and model of your car, but if you paid extra to have additional safety features, let them know! This all makes it cheaper to insure your car, as some of these features either reduce the chance of an accident or make it more likely you will walk away unhurt.
Related: My Review of the Ford Fusion Hybrid
Some of these strategies to lower your auto insurance costs, like keeping a clean driving record and using your connections, are free. Others, like paying ahead of time and driving a safer car, may require more of an investment. Either way, there are substantial opportunities for saving money on your auto insurance (make sure it covers rideshare driving too – these companies all cover rideshare driving in your state).
In the end, I shopped around and settled on Allstate, working with Donnie Plunkett’s team here in Arizona to reduce my costs from $115 a month to $67. I strongly recommend you use the free Rideshare Insurance Marketplace – it’s so much less hassle to work with agents who are familiar with rideshare driving. That will save you time – and time is money, too!
What strategies have you used to save money on car insurance? Any tips I didn’t cover?
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-Melissa @ RSG
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