Uber & Lyft car and driver insurance can be a confusing topic, one that many drivers ignore. However, it’s important to pay attention to the insurance options out there. If you haven’t looked into Uber car insurance recently, you should, as many companies have expanded the Uber driver insurance (and Lyft!) options they have for drivers. RSG contributor Melissa Berry rounded up the current rideshare insurance options nationwide below.
Uber Insurance: Do You Need It?
Uber insurance can be confusing, complicated – and easy to ignore. After all, we as drivers are covered by Uber and Lyft, right? Yes – to a degree. But there are times when we are not covered or we’re not covered fully.
During period one (app on but no passenger in car), drivers are not covered at all by rideshare policies. And when you are en route (period 2) or on a trip (period 3), you’re covered by Uber and Lyft but there are deductibles to worry about. For Uber, your deductible is $1,000 and for Lyft the deductible is $2,500. This means you have to pay $1,000 – $2,500 before Uber or Lyft will cover you. Also, deductibles only apply to physical damage, not liability claims (h/t to reader Matt for this clarification).
So do you need car insurance for Lyft and Uber? In short, yes. If you want to be fully covered as a rideshare driver, you should get insurance. You can find a list of insurance providers in your state here, and we recommend you contact as many as are on the list so you can get the best coverage at the lowest price. It pays to shop around!
What else should you know about Uber insurance (and Lyft) providers? We’ll break down what you need to know about Uber car insurance, plus outline the different rideshare insurance options out there. You can decide which provider is best for you, then contact them for a quote.
Wait, Don’t Uber and Lyft provide car insurance?
Rideshare driving is divided into three periods: period one is when you’re online waiting for requests, period two is when you’ve accepted a request and are en route to pick up the passenger, and period three is when you’ve acquired the passenger and are driving to their destination.
During period one, you won’t receive any collision coverage – and the liability limits are much lower than normal. One nasty accident could quickly exceed them, putting you on the hook for many months’ worth of earnings. During periods two and three, Uber and Lyft provide commercial insurance with $1 million in liability but $1,000 deductible on Uber insurance and $2,500 deductible on Lyft insurance.
Another issue is that personal insurers reserve the right to nullify your coverage entirely if you violate their terms and using your vehicle for commercial purposes (such as Uber, Lyft, or food delivery) is one such violation. If (or when) your personal insurer finds out you’re a rideshare driver, they might drop you from your policy and/or deny coverage.
See more reasons to get rideshare coverage here.
How Does a Uber and Lyft Car Insurance Policy Work?
There are two main types of rideshare insurance: gap coverage and extended coverage. Both types protect you from financial disaster by modifying the “commercial activity” clause in your contract so that you can drive for Uber and Lyft without the risk of getting dropped from the policy. Gap coverage extends your personal policy to include period one, ensuring that you’ll be adequately covered no matter when an accident occurs. During periods two and three, you’ll still rely on James River – Uber’s insurance provider.
Some gap insurers, like Allstate, have additional perks like deductible reimbursement. Uber’s deductible during periods two and three is $1,000, and Lyft’s is even higher at $2,500. If you’re ever on the hook for that amount, Allstate will reimburse you so that the deductible you pay to James Rivers matches the deductible on your own policy.
Extended coverage takes it a step further by expanding your coverage (deductible and all) to include all three periods. The most important benefit is that you won’t have to deal with James River. They’re not known for having good (or even adequate) customer service, and getting a claim paid out can take months – which can be downright devastating if you drive full-time.
Extended coverage from a company like State Farm or GEICO ensures that you won’t be in for any unpleasant surprises. Note: some insurance companies will cover physical damage but not liability claims. Check with your insurance agent to confirm whether your policy offers true “extended coverage”.
Uber Car Insurance Policies by Company
Allstate offers Uber insurance and Lyft car insurance to residents of the following states:
- North Carolina
- New Hampshire
- New Mexico
- Rhode Island
- West Virginia
Allstate’s coverage works by adding what’s known as a “rideshare endorsement” to an otherwise standard Allstate auto policy. The endorsement prevents you from being dropped from your policy as a result of driving for Uber or Lyft – and it closes the all-important Period 1 coverage gap.
Extra perks: In addition to keeping you legal by allowing for ridesharing (and by closing the Period 1 coverage gap), Allstate’s rideshare endorsement also comes with a big perk: deductible gap coverage.
Lyft’s deductible is pretty high – $2,500, to be exact. That means if you get into an accident, you’ll be on the hook for damages up to $2,500. Uber’s deductible is lower but is still at $1,000.
Deductible gap coverage through your Allstate rideshare policy will reimburse you for a portion of that deductible, so that it matches the deductible on your personal policy.
You’ll still need to pay the full amount to the TNC first – but once you send the receipt to Allstate, they’ll pay you the difference between the TNC’s deductible and your personal one. If you’re on the hook for the full $2,500, but your personal deductible is only $500, Allstate will reimburse you $2,000.
In addition to Uber and Lyft, Allstate works with any rideshare company that is part of the TNC network (call your agent for more details).
GEICO offers rideshare coverage in all states except for the following:
- New Jersey
- New York
- North Carolina
Called “hybrid insurance”, GEICO offers insurance to part-time and full-time drivers with little restrictions, plus GEICO also covers food delivery (which is rare among auto insurers). This means if you drive for delivery and rideshare (which we recommend), your GEICO policy will have you fully covered.
GEICO’s hybrid policy means you are covered for all three periods of Uber/Lyft driving. You are covered when the app is off (personal driving), when the app is on with no passengers (period one) and while the app is on and you have passengers in the car (periods 2 and 3). Your passengers are also covered by your GEICO insurance policy when they are in your car.
With GEICO, liability is covered in all phases. This means your GEICO car policy coverages (such as rental, medical payments for you or comprehensive) actually extend through all three periods. So if you have an accident at any point, you can go through GEICO.
In addition, your GEICO hybrid insurance policy also covers you when you are driving delivery.
GEICO’s hybrid auto policy is aimed at part-time drivers, but if you are a full-time driver, you can also get the hybrid auto policy. On a corporate level, the company wants to focus on insuring drivers who only do rideshare driving part-time, since they represent a lower risk. According to GEICO, there are no mileage restrictions technically speaking, but we recommend you reach out to GEICO at 866-509-9444 for more information.
Where to get a policy? You’ll go through GEICO’s website or call them at 866-509-9444 to get a hybrid auto policy quote. Make sure your state is covered by checking out our insurance marketplace here.
State Farm offers rideshare-friendly policies in the following states:
- New Hampshire
- New Jersey
- New Mexico
- North Dakota
- South Carolina
- West Virginia
- Washington, D.C
State Farm also extends your personal coverage through all three periods. Specifically, when your Uber/Lyft app is on and you’re waiting for a ping, coverage extends from your personal State Farm auto policy. Coverage may include liability coverage for property damage and injury to others, physical damage coverage for damage to your car, and emergency roadside service. Once you’re matched with a rider or are transporting him or her, the same coverage — minus liability to others — may apply.
State Farm’s TNC Endorsement is aimed at part-time drivers, but this is not a requirement to purchase this type of coverage. On a corporate level, the company wants to focus on insuring drivers who only do rideshare driving part-time, since they represent a lower risk. However, there isn’t a good way to quantify how much driving people are doing – or what percentage of it is ridesharing.
From what we’ve been told, you’ll still be able to acquire a State Farm rideshare policy regardless of how much you drive – and you can rest assured that there are no time or mileage limits that go along with the policy. You can work and drive as much or as little as you like, and you’ll still be covered regardless.
Farmer’s is available in the following states:
Rideshare insurance from Farmers closes the period one gap by adding an endorsement to your policy, extending your personal coverage to include period one. That way, you’ll maintain full coverage around the clock.
It’s worth noting that Farmers’ Uber insurance is not a commercial policy. It leaves things entirely up to the company you’re working for during periods two and three – so if the company you’re driving for doesn’t cover you with their own policy while you’re working, Farmers rideshare insurance won’t help you. For those that work part- or full-time for Uber and Lyft, though, “hybrid” policies like Farmers’ are a great choice.
Additional perks: Farmers offers a rental car/loss of use option which will either a) provide you with a rental car, or b) pay you a set amount per day your car is out of commission. If you set your “loss of use” amount at $50 and your car is in the shop for 10 days after an accident, you can opt to receive a rental car or $500. That money can help cover lost wages and/or your deductible.
The big caveat with USAA is the eligibility requirements, yet USAA is actually more accepting than you might think. Of course, if you’ve served in any branch of the military, you’re automatically qualified. This includes the National Guard and the Coast Guard.
If your parents or grandparents were USAA members, you’re likely qualified as well – even if you’re more than a generation apart. But before you assume you aren’t eligible, double-check with all of your family members to see if they’ve ever been members
Although USAA is active in every state, they only offer their rideshare policy add-on in some states – but the list is growing. Currently, USAA offers their rideshare add-on in:
- North Dakota
USAA also has plans to expand rideshare coverage to Connecticut, Louisiana, Missouri, and New Hampshire in the near future.
USAA does offer what’s known as “gap coverage” or “period one coverage.” USAA extends your personal coverage to include period one. But as with any rideshare policy, its most important feature is that you won’t be dropped from the policy at will: without a rideshare-specific policy, your insurer could stop covering you the minute they discover you’re using your vehicle for commercial purposes.
Erie Insurance was the first insurance company to specifically market to the rideshare driver market. While they may not have the well known brand name of the bigger players, they are rated A+ (Superior) by A.M. Best. You can find Erie rideshare policies in the following states:
- Washington, D.C.
- Rhode Island
Erie highlights the following features of their rideshare friendly policy:
- Business Use – Erie will classify the car you use for rideshare as business use.
- Covered All The Time – Erie provides coverage even when driving for rideshare. This means that miles driven for rideshare need to be included when rating that vehicle for the policy.
- Whole Household – Erie requires every car in the household be insured on the same Erie Insurance policy if one of the vehicles is being used for rideshare purposes.
- Rate Lock – This is a unique feature where claims and tickets will not increase your rate.
- Glass Coverage – Most insurance companies will fix a small crack in a windshield at no deductible, but Erie will waive the deductible on all glass claims.
Liberty Mutual is offered in many states, but isn’t a driver insurance option for drivers, as it doesn’t actually offer car insurance. However, it does offer protection, including:
- Cancellation – Liberty Mutual will not cancel a policy based on the policy holder being a rideshare driver. Rideshare driving and conversations with agents regarding rideshare driving will be noted on the policy.
- Coverage – Liberty Mutual is only providing coverage for non-rideshare (personal) related driving.
- Possible Gap – Liberty Mutual does not provide coverage while the app is on. This includes the time when the app is on and the driver is between ride requests. Liberty Mutual does not offer period one coverage.
- Miles – Liberty Mutual does not include miles driven while the rideshare app is on when rating the vehicle.
- Multi-car – Liberty Mutual will not insure just one car that is used for ridesharing. There has to be more than one car on the policy where only one car is used for ridesharing.
- Personal use – Car can be classified as personal use instead of being classified as business use. This helps to keep premiums lower.
Basically, Liberty Mutual is doing what the rideshare companies have asked for all along… Let us (Uber/Lyft) cover the driver when our partner is driving for us and you cover your policy holder when they are driving for personal reasons or non-ridesharing purposes. This makes sense.
The only issue is when the driver has the app on and doesn’t have a ride request. At that time, the driver is covered by the contingent liability policy that the rideshare companies provide which is less than most personal policies and the coverage provided by the rideshare companies when the driver has a request. I don’t think this is a big issue as drivers should not be making it a habit of driving around with the app on without an active request as that is not an efficient use of mileage.
Progressive insurance offers the ability to add a rideshare endorsement to your personal auto policy in the following states:
If your state is not listed, Progressive may still be able to cover you through a commercial for-hire livery policy.
You’ll want to contact a Progressive agent to confirm coverage, but in most cases Progressive appears to provide gap coverage (coverage during period one) and in some states may provide full coverage through periods two and three.
Is it better to get a policy that covers all three periods, or will gap coverage be enough?
Obviously it all depends on the quotes you’re getting, but extended rideshare coverage is nice because you won’t have to deal with Uber’s insurance or Lyft’s insurance – and in rare cases, having redundant coverage during periods two and three could come in handy. If the accident is catastrophic and outstrips the liability limits on your own policy, the damages should theoretically roll over to Uber or Lyft’s policy.
Plus, if you have other benefits on your policy, like rental reimbursement, you’ll still be eligible for those regardless of whether you were on the clock when the accident happened. It’s also nice to have a good agent fighting for you in the event that the other person is at fault since you can go after lost wages, rental reimbursement, etc in that case.
Gap coverage is usually (but not always) cheaper, so it may be a better choice if you only drive part-time – but depending on which company you go through, you may be on the hook for those high Uber and Lyft deductibles if an accident happens on the clock.
The best way to choose is to get quotes from as many rideshare insurers as you can and compare your options.
How much does Uber insurance cost?
This is hard to answer, as insurance rates depend on dozens of factors, including your age, driving record, zip code, even your credit score. Typically, it is more expensive than regular insurance – but if it’s been awhile since you last shopped for quotes, you may find that rideshare insurance from another company works out cheaper than what you’ve got now. With some insurers like USAA, adding a rideshare endorsement to a policy can cost as little as $10 a month.
Ready to get rideshare insurance? Get a quote from an insurance agent in your state here.
If you currently have driver insurance for Uber and Lyft, what company are you with?
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-Melissa @ RSG
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