Changes to Uber, Lyft & Rideshare Insurance: What You Need to Know

Revised, January 29, 2020

The never-ending changes to Uber, Lyft, rideshare insurance policies continue to challenge drivers. Many of you are aware, there are some serious holes and gaps in auto insurance coverage, which can put rideshare drivers into a high risk of damage, money, and liability if not properly handled. At United Agencies, we know exactly what you want to get the coverage you need.

Basic Elements of Rideshare Insurance

It’s important to know there are:

• Coverage Periods
• The “Coverage Gap”
• Coverage Types

Before we dive into how drivers are at risk with the standard insurance provided, we need to define a few time frames, or “Periods” that are used to determine the coverage that applies to an accident. These periods are broken up into three distinct categories, and apply to the different activities drivers are partaking in.

Period 1: Driver is logged into the app but waiting for a request. (“driver mode”)
Period 2: Driver has a request and is en route to pick up a passenger.
Period 3: Passenger is in the car and is en route to the desired destination.

While coverage technically applies to almost every one of these periods, the coverage provided between Periods 1 & 2 leave room for holes or gaps, and is significantly lower than during Periods 2 & 3.

Types of Rideshare Insurance Policies

What type of rideshare insurance do drivers need to be protected? Insurance companies today are adapting to the growing transportation industry, and offer a few different types of rideshare insurance policies. They cover a wide spectrum, but the two most common types are Gap Coverage and Full Coverage.

Gap Coverage Policies

Drivers that understand the insurance gap may opt for a Gap Coverage rideshare insurance policy. This type of policy is fairly basic, but focuses on reducing the liability between Period 1 and Period 2, narrowing the coverage gap. Gap Insurance offers excess coverage that expands what drivers receive from an Uber or Lyft policy in Period 1. Policies like these are can be more affordable and are available nationwide.

Full Coverage Policies

The other popular rideshare insurance policy type is a Full Coverage policy. This type of policy is most like a commercial insurance policy and covers a wide range of coverage options. These include basic coverage, along with excess coverage for the areas above outlined during Periods 2 and 3.

Understanding the Coverage You Need

As a rideshare driver, from the moment a ride contacts you to the point where you deliver a rider to their chosen destination, you need to ensure you are properly covered and that your liability policy covers everything inclusively.

When the driver is on the clock, but is not engaged in a ride, the insurance situation can be a little confusing. This “gray area” is where the most trouble can happen, mainly because the rideshare companies may not be providing you the full coverage you need for this interim period.

So, if a driver is in an accident when he/she is logged into the rideshare app, but is not currently engaged in a ride, Uber and Lyft do offer some limited liability insurance but the coverage is decidedly not comprehensive. This is where United Agencies can help ensure you properly covered.

Cost

Rideshare insurance is supplementary coverage, which in the recent past was relatively inexpensive to acquire. However, at the end of 2019 rideshare insurance premiums have increased substantially, and a number of insurers have stopped offering the coverage.

Drivers who find that their plan does not have a rideshare insurance policy have been pushed into commercial insurance, which is significantly more expensive - costing as much as $1,800 per year on average. At United Agencies, our expert staff can help reduce or alleviate higher fees.

Rideshare Insurance is Not Delivery Insurance

There is some confusion between rideshare coverage versus delivery coverage. Delivery insurance covers delivering food and/or products for services such as Uber Eats, Postmates, DoorDash, or Amazon. A United Agencies representative can help explain these differences and help insure you for exactly what you need.

Perks

The good news is there are some perks to obtaining higher coverage. In some locations, rideshare insurance can be deducted off of your taxes, and the policy holder has a chance to take advantage of benefits such as roadside assistance, safe-driving discounts, and options to bundle insurance to get discounts on homeowners and life insurance as well. Additionally, this insurance usually covers the costs associated with property damage.

Today, it is more important than ever to get the right coverage for you and your passengers. Driving uninsured or underinsured can cause tremendous legal and financial consequences to everyone involved. Contact United Agencies today for a free quote and consultation. You have nothing to lose and everything to gain by speaking with our trained staff.

To Conclude

There’s a lot to learn about rideshare insurance, but the most important thing is to have a rideshare insurance policy before you get on the road:

• It’s important to understand the differences between your personal insurance policy and a TNC-provided policy.
• Often times there is a coverage gap between your personal policy and your TNC policy, so consider getting an additional policy.
• Depending on where you drive, rideshare insurance may not be available.
• In addition, your personal insurance company may not offer this type of insurance, so be sure to address these issues right away and verify you’re covered.

Have Questions? Talk to a UA Rep about deductible costs on your Uber / Lyft provided insurance, the cost of rideshare Insurance, comprehensive and collision coverage, and any other insurance needs you may have.