Where Can I Get Rideshare Car Insurance?

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Imagine This: 

You live in a major city with a booming rideshare economy, and you happen to own a car and have a few free hours every night, so you decide to become a driver for one of the major rideshare apps in your town. Things are going great: you’re making a steady stream of extra income, seeing new parts of your town, and having interesting conversations with both tourists and locals alike. One slow night, as you’re circling a major downtown area looking for riders, you look down for a second to adjust the radio and accidentally tap the car ahead of you.

No one is injured, but the other car is damaged — and it is your fault. Luckily, you have ​collision insurance with a low ​deductible, so you and the other driver decide to call the police and file an incident report so that your insurance company can send the other driver a check for the damages. The police arrive and take down everyone’s information and exactly what happened, including the fact that you were driving for a ridesharing company at the time of the incident. You and the other driver exchanged contact information and everyone wishes each other a good night. Opting not to tempt fate, you decide to end your shift early so that you can head home for the evening and file your insurance claim and get this ordeal over with. 

As you're drinking your morning coffee a few days later, you get a call from your insurance agent, who also happens to be a family friend. He’s really sorry to inform you, he says, that your claim cannot be processed.

As he continues with the details, he starts becoming agitated and proceeds to tell you that because you didn’t notify your insurance company before you became a rideshare driver to discuss coverage options, your policy has been canceled by the company. What are you going to do now, he asks, in a tone as exasperated as you should feel?

You spit out your coffee. 

If you are one of the hundreds of thousands of individuals using or considering using their own car to become a part-time driver for a ridesharing company, you may think you can just download a ridesharing app and be on your way to making some extra money — but think again. If you want to become a rideshare driver, you need to obtain rideshare insurance or risk costly gaps in coverage.

Do I Need Rideshare Insurance? 

If the company you drive for provides coverage before, during, and after you pick up passengers or you have previously purchased a commercial auto insurance policy, you’re in luck: you probably don’t need rideshare coverage. However, you could still risk losing your individual auto coverage if you do not report that you are a rideshare driver to your insurance company, so it’s best to do so before you weigh your options. If it is an issue, or if you drive for one of the many ridesharing companies that do not provide coverage during all stages of driving for them, you will need rideshare insurance. Even if they do continue to insure you, your personal auto insurance is unlikely to cover any expenses incurred while you’re driving for a ridesharing app.

Each state has its own policies regarding ridesharing insurance, so it’s important to do your research. 

What Does Rideshare Insurance Cover? 

If you have your rideshare app on and are logged in, there are three distinct phases: during Phase 1 you are logged in and waiting for a customer to request a ride. During Phase 2, you have accepted a rider and are headed to pick them up. During Phase 3, you are taking your passenger from point A to point B. Most rideshare apps cover their drivers during the 2nd and 3rd phases, but most do not cover drivers during Phase 1, leaving you at significant risk, since your personal auto insurance likely does not cover you during this phase, either. 

Most rideshare insurance helps by covering you during phase 1, though some policies cover you during phase 2 and 3 as well since most ridesharing apps have steep deductibles for coverage during these phases.

If this sounds complicated, don’t worry: many insurance companies are now offering hybrid insurance plans which act as both individual and rideshare insurance policies to avoid confusion. 

Types of Rideshare Insurance

  • Hybrid Insurance. As previously mentioned, hybrid insurance covers you at all times and is a hybrid between a personal policy and a rideshare-specific policy. ​
  • Commercial coverage. Generally much more expensive, commercial coverage is designed for full-time drivers or drivers of large vehicles. Given the steep deductible of the coverage of most ridesharing apps, this double coverage can provide additional peace of mind.
  • Phase 1 coverage. A rideshare insurance policy that covers a driver during phase 1. This sort of policy bridges the gap between the coverage most apps provide their drivers and the coverage of that driver’s personal policy. While some rideshare companies do offer coverage of phase 1, it varies by state and is generally not collision coverage. 
  • Rideshare-friendly personal policies. Your normal personal auto insurance policy if you’re lucky enough to have a provider that will not drop you for being a rideshare driver. This sort of policy does not cover you during phase 1, 2, or 3 of your rideshare, so you may still be at risk. 

Where Can I Buy Rideshare Insurance? 

Unfortunately, not every insurance company has policies designed for rideshare drivers in every state. However, several trusted major companies offer policies across the country. For example, Geico offers a hybrid policy in 35 states for about $150 more per month than a regular personal policy. If you are a veteran or the family member of a veteran, the USAA offers rideshare policies for as little as $6 to $8 more per month. As the rideshare industry expands, other insurance companies are constantly updating their offerings, so it’s worth consulting your current insurance company to discuss plans for the future. 

How to Buy Rideshare Insurance

  • Contact your personal insurance company. If you don’t let your insurer know that you plan on driving for a ridesharing app, they could cancel your coverage. But your insurance agent also might be able to provide you with helpful advice or in-house rideshare policy suggestions. 
  • Find and mind the gaps. Figure out exactly when you’re covered by your personal auto insurance and by the ridesharing app. Figuring out the gaps in your coverage is the first step in figuring out how to fill them with additional coverage or self-insurance by committing to create additional savings. 

What If My State Doesn’t Offer Rideshare Insurance?

Unfortunately, if your state doesn’t offer rideshare insurance, you might have to buy a commercial insurance policy, which can cost up to ten times as much as a personal policy. 

Options for the Future

It’s important to remember that the ridesharing industry is very, very young: in just a few short years, it’s grown from nothing to a multi-hundred billion dollar industry with millions of riders and hundreds of thousands of drivers; the auto insurance industry is very much still catching up. Thankfully, they’re catching up pretty quickly. If you had wanted to become a rideshare driver a few years ago, you probably would have had to purchase expensive commercial coverage that wasn’t designed for rideshare drivers, didn’t cover you during personal time, and provided more coverage than you would ever actually need. Ridesharing apps themselves gradually started offering coverage, but it was often complicated and convoluted. Thankfully, the options for ridesharing drivers are only increasing and becoming simpler and more affordable. If you are a ridesharing driver, you should make a habit of regularly evaluating your insurance options to make sure you always have the best policy for you and your needs, both personal and professional.