Importance of rideshare insurance

The rideshare industry is growing and continues to expand. This means that, in theory, the demand for rideshare insurance should also be growing. But that is not the case, in fact, about 90% of drivers who are part of Uber or Lyft do not have rideshare insurance.

Why is this a big problem? Well, rideshare and insurance companies see a few different phases of ridesharing. They are the following:

Period 0: Your application is offline and you are covered by personal auto insurance

Period 1: Your application is online, waiting for applications. Your personal auto insurance does not cover it at this time, nor does insurance purchased through the rideshare company.

Period 2: You have received an application and if you have insurance through Uber and Lyft, you are now covered.

Period 3: He now carries passengers and is covered by the rideshare companies’ policy.

So as you can see there is a gap where you would not be covered. If an accident occurs during Period 1, you could be caught paying 100% of the damages. But that’s not the only reason you should consider getting rideshare insurance.

Without rideshare insurance, you risk having your personal auto insurance coverage canceled by your insurer. The reason is that you have to specify that you are using your car to earn money because it is not covered by traditional car insurance. After you are discharged, your premium will increase significantly since you are now considered high risk.

Another potential hurdle is that not all states offer rideshare insurance yet. Prices also vary from state to state and company to company, so make sure you get about three rideshare insurance quotes to ensure the best deal for your needs.

However, the good news is that there are many options to ensure that you are adequately covered. You need a policy of some form since you are technically using your vehicle for business use since you are making money driving it. So with that said, if your state doesn’t offer rideshare insurance or if it’s a better fit, you may want to go with commercial auto insurance.

There is also the option to purchase Period 1 coverage to close the gap in the insurance you may already have directly from Uber or Lyft. Some insurance companies even offer a deal where they won’t let you in as long as you disclose that you are a rideshare driver. The only drawback is that they won’t cover you while your application is online, so experts recommend that you only use this option if you don’t move around much while you wait for applications and if you have insurance from the rideshare company. Also, be sure to check with your insurance provider that this is the case to avoid a situation where you get dumped, at all costs.

Ultimately, it all comes down to a few things, one of which is the law in your state. As states have personal auto insurance laws, many are also adding laws about rideshare insurance and the minimum coverage you need. This should be a main motivating factor. In addition, you should consider how you plan to handle an accident of any scale during Period 1 of a driving session. As mentioned above, you could easily wipe out your bank account without careful consideration.

Therefore, as a rideshare driver or if you are planning to become one, it is crucial to look for rideshare insurance. Although your premium may increase slightly, it is affordable, especially in relation to having to pay for all the damages from an accident. Also, many insurance companies allow you to add to an existing auto insurance policy instead of issuing an entirely new one, which is extremely beneficial for you as a customer. So in general, it is not only vital, but also worth having rideshare insurance.