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6 min read

    6 min read

    Rideshare insurance is the bane of many drivers’ existences, but what if rideshare companies like Uber and Lyft made it easier to navigate and get? It turns out, Lyft is piloting a new program to test this out. Senior RSG contributor Jay Cradeur covers a new program between Lyft and Geico aimed at giving drivers cheaper access to rideshare insurance.

    I don’t know how I did not know about this, but I am now getting paid by Lyft to use Geico rideshare insurance. I recently purchased a badass 2017 black Honda Accord Hybrid, and the first thing I did was to get it insured with a personal auto insurance policy.

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    The premium was $175 per month for a $500 deductible. A day later, I contacted Geico and requested a quote for rideshare insurance with the same coverage and a $500 deductible.  This is when things got very interesting.

    A Quick Primer on Rideshare Insurance

    If you are a rideshare driver and you don’t have “rideshare” insurance you are gambling with your financial future.  If you don’t have rideshare insurance and you get into an accident that either Uber or Lyft don’t cover, then your personal insurance company may very well cancel your policy and leave you high and dry.

    Looking for rideshare insurance in your state? Our rideshare insurance marketplace has a list of reputable agents familiar with rideshare insurance by state.

    If you are dishonest with your insurance company about how you are using your car, and you need your insurance company to pay on a claim, they will have the legal right to refuse to pay and to cancel your policy.  You are playing with fire.

    What Do Drivers Need to Know About Rideshare Insurance?

    Uber and Lyft will cover you when you are driving to pick up a passenger and when you are driving a passenger.  However, all the time you are driving around waiting for a ping, Uber and Lyft do not cover you. And, as stated before, you will most likely not be covered by your personal policy.

    Rideshare insurance covers you in every situation in which you drive your car. Therefore, it is essential for every rideshare driver to carry rideshare insurance.

    Cost Comparison Between ‘Regular’ Insurance and Rideshare Insurance

    Rideshare auto insurance, I assumed, would be more expensive than personal auto insurance.  I spoke to a State Farm agent and she told me that rideshare auto insurance would be 19% more than a personal insurance policy.

    That’s not too bad.  That means if you were paying $175 for a personal policy, you would be paying $208 for a rideshare policy. For some reason, I thought a rideshare policy would be significantly more expensive.  It is not.

    We also find that many drivers actually save money or pay about the same for rideshare insurance as personal insurance because they haven’t shopped around for insurance prices in years.

    If you have resisted rideshare insurance because you thought it would be exorbitantly expensive, it is not.  As you keep reading, I will share with you a policy that will blow your mind.

    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).

    Hello, Geico

    I contacted Geico and requested a quote for a rideshare policy with the same $500 deductible.  I was asked some questions about my estimated one-way trip length, number of trips per day, and number of days per week.

    When answering these questions, I was fair and conservative.  2 miles per one-way trip average, 15 rides per day working 5 days per week.   The Geico representative told me the revised monthly premium would be $140 per month.  It was $35 less than the personal auto policy I had from the day before!

    When I sit back and think about it, this does make sense. Uber and Lyft provide coverage for most of our rideshare activities.  Geico is filling in the gaps, which, in most cases, is less than the coverage needed for a purely personal policy. Geico’s insurance is primary for all three phases of ridesharing as well as on-demand delivery (like DoorDash, GrubHub, etc.) – not a traditional personal policy with limited rideshare endorsement. Drivers can drive/deliver knowing they’re always covered with this policy from Geico.

    Geico and Lyft Working Together

    During my conversation with Julia, my Geico commercial insurance representative, she told me that since I was now a Geico rideshare insurance client, and since I work in California, I am entitled to a 25 cents per ride bonus for all my Lyft rides.

    Frankly, I did not believe her – it sounded too good to be true.  If what she told me was true, then each week with 100 rides I would be given a $25 bonus.  That would be $100 per month, which would essentially reduce my insurance fee down to $40 per month.  Like I said, too good to be true.

    Contacting Lyft about Geico + Lyft Policy

    I contacted Lyft and inquired about this so-called commercial insurance bonus.  Lyft sent me this email and confirmed the bonus:

    Still, I did not believe it.  I have been told about programs and bonuses in the past and they never materialized.  I thought to myself, if this is true, that will be awesome.  If not, I am still happy with the very fair price I am paying for Geico’s rideshare insurance.

    Surprised By My Pay Statement

    After driving with the Lyft + Geico policy for a week, I looked at my weekly pay statement through Friday.  Well, it looks like miracles do come true.

    This week I have done 90 rides and I have been paid $22.75 in the form of Commercial Insurance Credits.  Fantastic!  I then went to look at the fine print on the Lyft website and there are a few restrictions:

    We are limited to a total of $500 in credits every six months. We can earn an additional $1,000 per year.  I am A-OK with that.

    After all, this cooperative program between Lyft and Geico reduces my $1,680 annual policy to $680 or $57 per month.  This is a powerful way to reduce your expenses.  This Geico + Lyft program is available now in California and is rolling out soon to other states.

    With the Lyft + Geico rideshare insurance, deductibles could be as low as $250, although this depends on the driver. My deductible with this Lyft + Geico rideshare insurance is $500.

    Summary

    Anytime we as rideshare drivers can find a way to reduce expenses, it is a wonderful experience.  Another way to look at this cooperative program between Lyft and Geico is it is a way to give you a $1,000 raise. Note: this program may work best for full-time drivers, but part-time drivers should look into it as well to see if it makes financial sense for them.

    Either way, it is a great idea and a sound program – I am already saving money.  I invite all of you Californians to get a quote and compare this policy to your current policy.

    When you add in the Lyft credits, you may see this as a way to cut your expenses and give yourself a raise. You all go out and have a great day. Be safe out there.

    Readers, do you think this policy with Geico is something you would sign up for, if it came to your state?

    Never pay full price for gas again.

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    -Jay @ RSG

    Jay Cradeur

    Jay Cradeur

    Jay Cradeur, a graduate of the Haas School of Business at UC Berkeley, is a full-time driver with over 26,000 rides. Jay has a driver-focused podcast: Rideshare Dojo with Jay Cradeur. When Jay isn’t writing articles or making videos, he is traveling the world. You can see what Jay is up to at www.nomadjay.com.

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