How does rideshare car insurance work?

Rideshare car insurance is a special type of hybrid insurance policy that you may choose to purchase if you work for Uber, Lyft or another similar type of company.

This type of insurance coverage protects you from financial liability in the event of an accident, regardless of whether you are driving on or off the job. 

Your ridesharing company will insure you whenever you transport passengers, but add-on ridesharing policies can help to fill in any necessary gaps in the event of an accident, especially if you cause a collision while waiting for requests from new passengers. 

Moreover, you can get a commercial auto insurance policy if this type of hybrid coverage is not available in the state where you live and operate a motor vehicle. Currently, only certain states and insurance companies sell these special hybrid policies to drivers who use their vehicles for professional and personal use. To learn more about rideshare insurance and how it works, review the information below. 

What is car insurance for rideshare drivers?

Rideshare gap insurance is a special type of coverage that you may wish to purchase if you work for Uber, Lyft, Instacart, Amazon Flex or another type of ridesharing company.

While your ridesharing company will insure you while you transport passengers or wait for a new ride request to come in, the coverage you receive will be minimal unless you have passengers in your vehicle or you are on your way to pick up a passenger. 

Additionally, the type of rideshare insurance coverage you receive through your ridesharing company will vary throughout each insurance period or phase. These periods include:

  • Zero. During this time, your ridesharing app is turned off and your personal insurance policy must cover you. If you work for Uber or Lyft, these companies will not cover you unless your app is turned on.
  • One. During Period One, your app is turned on and you are waiting for a new ride request to come in. Uber and Lyft provide you with liability coverage during Period One, but your personal policy will not cover you at this time unless it includes ridesharing coverage. 
  • Two. During Period Two, the ridesharing company’s insurance policy takes full effect. As a driver, you enter this phase once you accept a ride request and travel to your passenger. 
  • Three. Your commercial rideshare insurance policy takes full effect once you pick up your passengers and transport them to their destination. This insurance phase is known as Period Three. 

To protect yourself from financial responsibly, many rideshare insurance companies sell hybrid or add-on policies to fill in the gaps between these insurance periods. However, these types of policies are not available in all states. You must purchase a commercial auto insurance policy if you cannot obtain ridesharing coverage in the state where you live. 

How to Get the Cheapest Rideshare Insurance Policy

To get a rideshare insurance quote, simply contact your current automobile insurance agent to let him or her know that you drive for a ridesharing company and would like to learn more about the cost of adding this type of coverage onto your existing policy. If this type of policy is not available through your insurer, however, you must request a quote for a commercial policy instead. 

How much is rideshare insurance? When you purchase a ridesharing insurance policy, you must pay for this type of coverage in addition to your standard insurance policy. The cost of rideshare insurance will vary depending on several factors, like where you live and operate your motor vehicle.

What is commercial auto insurance?

How much more is commercial car insurance and when is this type of coverage necessary? In most cases, you need to purchase commercial or ridesharing coverage for your motor vehicle if you receive money for transporting goods or passengers. However, specific insurance requirements and minimum coverage limits vary by state. To explore the commercial auto insurance requirements by state law, contact your insurance agent or State Department of Insurance.  

Moreover, even the best commercial car insurance policies will cost more than ridesharing coverage, as commercial coverage requires you to obtain higher liability limits than a standard automobile insurance policy does.

If your state does not require you to purchase a commercial policy for your motor vehicle, ridesharing coverage will be a more cost-effective option for you. You may even be able to get insurance discounts if your car has top safety features or other upgrades.

Furthermore, you may need to purchase commercial coverage if you work for Uber or Lyft and reside in a state where ridesharing coverage is not available. In many cases, your personal automobile insurance policy will not protect you from financial responsibility if an accident occurs while you are transporting passengers for money or delivering goods to paying customers. 

How to Get Commercial Car Insurance Quotes Online

How much is commercial car insurance?” is a question you may ask if you reside in a state that does not sell ridesharing policies to drivers. Since commercial policies require you to obtain higher coverage limits, the amount of your insurance premiums will also increase when you purchase this type of policy.

On average, the commercial auto insurance cost ranges from $1,200 to $2,400 per year. However, your rates will vary depending on the following factors:

  • The nature of the work
  • The make, model and year of the vehicle you wish to insure
  • The vehicle’s gross weight
  • Your driving and insurance claims history
  • The purchase price of the vehicle
  • Your coverage limits
  • The amount of your deductible

When obtaining commercial auto insurance quotes from any of these companies, remember to provide as much information as possible about the nature of your work and the type of commercial vehicle you wish to insure.