Rideshare insurance can be a bit overwhelming for a new driver. First, you have to understand why you need it, then you have to find a company in your state that offers it, and finally, if you have more than one option in your state, you have to decide which company’s policy is the best fit for your situation.
Today, we’re going to compare actual quotes from a few different insurance companies here in California. Rideshare insurance options vary by state, so be sure to take a look at our state-by-state list of rideshare-friendly insurance companies and recommended agents. If you only have one option in your state, it’s an easy decision, but it seems like every day, more and more companies are jumping on the rideshare insurance bandwagon.
Why Rideshare Insurance?
Uber and Lyft only provide commercial insurance while you’re en route to a passenger OR have a passenger in your vehicle. So that leaves a gap period (called Period 1) where the app is on, yet you have no collision coverage from Uber and Lyft and much lower liability limits than during Periods 2 and 3. That puts you at greater risk if you get into an accident while driving around without a passenger or waiting for a ping.
Additionally, most personal auto insurance policies will not allow you to be a rideshare driver. If they find out you’re driving for Uber and Lyft, they will drop you from your policy – simple as that.
Let’s Talk Some More About Periods
In the rideshare insurance business, you’ll often hear references to periods one, two, and three. Period one is when you’ve got the app on and are waiting (or driving around looking) for a ping. Period two is when you’ve accepted the request and are on your way to the passenger. And period three is when you’ve got passengers in your car, and are en route to drop them off.
Regular personal auto insurance considers all three of these commercial activity – thus, they won’t cover you during any of these periods. This means, if you’re in an accident and they find out you were on the job, you’re totally reliant on the rideshare company to pay any claims. Likewise, your personal insurance may also drop you from their policy if they find out that you’ve been working for a rideshare or delivery company.
Uber and Lyft provide $1 million liability and collision coverage during periods 2 and 3 but during period 1, you won’t get any collision coverage and the liability amounts will be much lower.
Related article: Essential gear every rideshare driver should have
If you get into an accident during periods 2 or 3, you will have to deal with Uber and Lyft’s insurance companies. Uber uses James River and Lyft uses Steadfast Insurance. The policies are nearly identical except for the fact that Uber’s policy has a $1,000 collision deductible and Lyft has a $2,500 deductible.
I’ve heard mixed reviews from drivers on these companies (especially James River), so having coverage of your own may get you back on the road quicker – and save you from having to fight with their bureaucracy to get your claim paid.
Rideshare Insurance Options
All rideshare insurance policies are not created equal. Some companies have created policies where they won’t immediately drop you if they find out you’re a rideshare driver – but they also don’t cover you anytime you’ve got the app on. Other companies offer coverage that extends through every period, from the moment you turn the app on to the moment you turn it off.
The price of insurance also varies widely based on dozens of factors, including your driving record, your marital status, your credit score, and even whether you own or rent your home. The best advice I can give you is to shop around. Get quotes from as many companies as you can since the cheapest option listed here may not be the cheapest option for you!
Below, you’ll find quotes from several companies that offer rideshare insurance here in California. I gave each of these companies an identical data set and asked them to generate a quote based on the following info:
- The car we selected for these quotes was a 2011 Prius (this is the average year/make model off my survey).
- Each policy offers the same coverage limits, including 100k/300k/100k liability coverage and a $1,000 comprehensive/collision deductible.
- We assumed an imperfect driving record with two recent speeding tickets
- The address provided was my own (I’m a renter here in Long Beach, CA), as was the DOB (1987) and marital status (married).
Here were the results:
The quotes ranged from $113 to $205 a month which is in line with what I’ve found for most other drivers. If you have a better driving record or you live in an area that is cheaper to insure, you may be on the lower end. But for a lot of drivers, the average quote may come in at around $150/month.
We received this quote from Kyle Middleton at State Farm. State Farm is one of the only companies that offers coverage across the board in all three periods, so you’ll never have to worry about going through a TNC to process your claim – and they’ll work to refund your deductible when you’re not at fault. The quote we received also includes renters’ insurance with $10k in property coverage.
The real benefit of this policy in my eyes is the value it provides during Periods 2 and 3 since, if you get into an accident, you will have the option of getting coverage through State Farm instead of having to deal with James River for example. Let’s just say I haven’t gotten many e-mails from drivers praising their experience with James River 🙂
To find a local State Farm agent in your area or to see a full list of rideshare insurance providers, please click here.
We received this quote from Ken Goodwin at Pacific Preferred Insurance. Mercury’s quote came in at the top but they do offer a nice 12% discount if you bundle it with homeowners’ insurance. The renters discount is only 2% but they did not include that as part of this quote (although we did have a renters’ discount with other companies). It’s also interesting to note that our quote assumed two moving violations and if we would have had zero violations, our Mercury quote would have dropped down to just $838 for a 6 month policy.
I’ve actually heard from many readers that Mercury has been among one of the most inexpensive options when it comes to rideshare insurance, but for me they happened to be among the highest. I think what that should tell you as a driver is that it pays to get multiple quotes and compare not only the cost but also the coverage.
The full policy quote can be viewed here.
To find a local Mercury agent in your area or to see a full list of rideshare insurance providers, please click here.
We received this quote from Roger Heighton, a Bay Area Farmers agent. Farmers offers period 1 coverage, but no period 2 or 3 coverage, opting to let the TNCs handle that part instead. They also told us that when calculating your premium, they only take into account the personal miles you put on your vehicle – the miles you drive for Uber et al don’t count (I believe other companies are the same).
The policy quoted also includes “permissive use,” which means your car will be insured even if someone else is driving it. The quote listed here includes a discount for paperless billing and a discount for insuring multiple cars is also available.
The full policy quote can be viewed here.
To find a local Farmers agent in your area or to see a full list of rideshare insurance providers, please click here.
This quote came from Doug Eisold, an Allstate agent out of San Diego. Allstate’s coverage was the most affordable out of all the companies we compared, and while they do not offer coverage during period 2 and 3, they do offer Period 1 coverage which is essential for rideshare drivers.
Interestingly though, for periods two and three, Allstate offers what’s known as high-deductible gap coverage. This coverage will reimburse you for part of your deductible after you submit a claim to your rideshare company. In other words, if you get into an accident during period 2 or 3, Allstate will pay part of Uber’s $1000 deductible (or Lyft’s $2,500 deductible, etc) to make it match the deductible on your policy. Note that in our quote we asked for a $1,000 deductible, but if you pay more for a $500 deductible for example, Allstate would then cover the difference if you get into an accident during Period 2 or 3 and go through Uber/Lyft’s insurer.
This is a great option for drivers who need to keep it legal during period 1, but don’t mind going through the TNCs claims process if they get into an accident during periods 2 and 3. Especially if you are a Lyft driver since $2,500 is a very high deductible amount to have to cover.
The full policy quote can be viewed here.
To find a local Allstate agent in your area or to see a full list of rideshare insurance providers, please click here.
USAA offers a variety of insurance products to military personnel and their relatives, so it’s not an option for everyone. But if you are eligible for coverage from USAA, they offer a great deal – you can add “rideshare gap coverage” to your existing USAA auto policy for as little as $6/month.
This only covers period 1, so you’ll still be on your own for periods 2 and 3 – but with rates that low, it’s a great deal nonetheless. We did get a quote from USAA for their ‘rideshare gap insurance’ product that came in at an additional $39.86 for 6 months. This amount would be on top of the cost for regular personal insurance though from USAA (which we were unable to get a quote for).
What are you currently using for your rideshare insurance?
-Harry @ RSG