Harry here. Last month, our rideshare insurance options page was one of the most viewed pages on our site, which tells me that there are still a lot of people who are looking for rideshare insurance. Today, Senior RSG Contributor Scott Van Maldegiam takes a look at the other side of the coin, though, and offers up some advice for drivers who may not have any rideshare-friendly insurance options available in their state.
When discussing auto insurance options, we focus mostly on rideshare specific options. Companies such as Farmers and Erie, for example, have well documented rideshare options available for drivers, and there are more options being announced every day. But even with all these new options, there are still some states that don’t have any rideshare-friendly policies available. So what do you do if you are in a state without any available or affordable options?
Rideshare Friendly Defined
I like to refer to rideshare friendly-insurance as personal auto insurance that will not cancel your policy if they find out you are driving for Uber or Lyft. They will not cover you during Period 1 (online, without a passenger), though, and they will not help you with your collision coverage if you are at fault in an accident while online. This means that you are on your own to fulfill the rideshare collision deductible of either $1,000 for Uber or $2,500 for Lyft.
This isn’t the best option, but you have peace of mind knowing that your policy won’t be cancelled if you are in a rideshare accident.
Risks of Driving Without a Rideshare-Friendly Policy
This section isn’t meant to scare you, but it is meant to make you aware of the risk of driving without rideshare-friendly insurance. You’ll need to calculate for yourself if the trade-off is worth the reward.
If you drive during period 1 and have a serious accident where you are at fault, this could put a strain on your finances, since Uber and Lyft’s contingent policy is the only coverage you would have. This coverage provides $50k per person, $25k property damage and $100k total per accident. Thirty-five years ago, I knew a person who was in an accident with a severe concussion (short term memory loss for weeks), 100 stitches in his face and was in the hospital for 3 days. This person received a settlement for $33k. In today’s dollars, that would use up the entire $50k person limit and then some. The driver who was at fault would have had to come up with the remaining amount.
And what about your car? Uber and Lyft provide no collision coverage during period 1, so you will have to pay for the repair yourself, or if your car is totaled, come up with the money for a new car. If your car is financed, you will still need to pay off the loan.
The coverage provided by Uber and Lyft for period 1 may not be enough if you get into an accident during this time.
The other risk is your insurance cancelling your policy. GEICO is known to do this when they find out you are a rideshare driver. I don’t know how they find out, but I have heard of many examples where the driver was not in an accident and GEICO sends a letter to the policy holder asking them to stop rideshare driving or GEICO will cancel the policy.
Cancellation is one of the worst things that can happen. Other insurance companies will view you as a higher risk if you have been cancelled by another insurance company, and so your rate will be higher once you have been cancelled.
Insurance Options When No Rideshare Options are Available
Find a Rideshare-Friendly Policy, At a Minimum
Insurance companies have become more lenient on cancelling policies when they find out you are a rideshare driver. They don’t want to lose customers because their competition is offering something that they aren’t. With that said, you don’t want to assume that your insurance company is one of the more lenient companies. If you want to stay with your current company, call your insurance company anonymously and ask if they will insure rideshare drivers. If you have a good agent, they will offer to call anonymously on your behalf.
Liberty Mutual is one example of a company that has rideshare friendly auto insurance nationwide. Unfortunately, they have not made their agents aware of this, so you may have to talk to a few agents in order to find one that is willing to do a little research. We have researched this and know that it is a standard piece of their nationwide policy.
I have also heard from other drivers that certain companies are now offering rideshare-friendly policies. When purchasing insurance, or anything else as important as this, don’t take anyone’s word for this. Check with your insurance agent and ask specifically if you will be cancelled if you drive for Uber. Again, just because they say “no”, don’t take their word for it. Ask to get it in writing. With Liberty Mutual, this is exactly what I did. I got it in writing. If they won’t provide anything in writing, then look for a different company.
Check Commercial Options
But commercial insurance is expensive, they say. Who is “they”? Have you ever researched the cost of commercial insurance? Could rideshare options not be available in your state because commercial policies are not that much more expensive than personal policies?
Related Video: How Can Uber Drivers Get Commercial Insurance?
It is very easy to assume that commercial insurance is prohibitively expensive. This is what I have always assumed. Recently though, I have heard of drivers switching to commercial insurance at a rate that is only slightly more expensive than their personal rate. Everyone’s situation is different as insurance rates evaluate a lot of different variables, so for some drivers, commercial policies may not be that much more expensive.
If you don’t have any rideshare-specific options, don’t assume commercial policies will be much more expensive. Make a few phone calls and see if this is the case. You might be surprised at what you find.
Most Importantly, Do Something
I have spoken with drivers who have thought, “It won’t happen to me.” I have also seen many drivers comment “Now what do I do?” when they have had an accident and were cancelled as a result. The best case scenario is that your insurance company finds out somehow that you are rideshare driving and they threaten cancellation. This at least forces the driver to make a change.
So be proactive. Decide to protect yourself. Be smart and make sure you have insurance that will protect you and won’t leave you in a situation that could affect your ability to rideshare drive and your ability to find affordable insurance options.
What’s Coming Next?
We are working on an update for our insurance options page, but in short, the fourth quarter of this year has seen and will continue to see more rideshare insurance options become available. Some I have already added to the rideshare insurance page, such as Travelers, but there are a few more coming. This includes existing companies expanding what they offer to more states and insurance companies that will be new to offering rideshare policies. So stay tuned.
Are you a driver who has decided not to explore rideshare insurance options? We would love to hear your reasons. I, for one, buried my head in the sand until I was in an accident with a taxi where I was not at fault. Even the best drivers can make mistakes.
Want to find rideshare insurance coverage in your state? Check out our Rideshare Insurance Options Marketplace where we have a full listing of options by state and recommended agents.
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-Scott @ RSG
Scott Van Maldegiam
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