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Ridesharing services like Uber and Lyft have become increasingly popular for both passengers and drivers. While these platforms offer flexibility and convenience, they also introduce unique challenges regarding insurance coverage. If you are a rideshare driver, understanding the different phases of your job and how insurance coverage works during each phase is crucial. This blog from Joshua E. Palmer will break down the basics of ridesharing insurance coverage, focusing on what protection is available and what additional steps you may need to take to ensure adequate coverage.
The Basics: How Rideshare Insurance Works
Rideshare insurance is a hybrid form of coverage that blends elements of personal auto insurance with commercial insurance. Most personal auto policies specifically exclude coverage for “commercial activities,” such as driving for a ridesharing service. On the other hand, rideshare platforms like Uber and Lyft provide varying levels of coverage depending on whether you are waiting for a ride request, en route to pick up a passenger, or transporting a passenger.
Insurance coverage for rideshare drivers is typically divided into three periods:
- Period One: The driver is logged into the app but has not yet accepted a ride.
- Period Two: The driver has accepted a ride and is on the way to pick up the passenger.
- Period Three: The passenger is in the car, and the driver is transporting them to their destination.
What Coverage Do Uber and Lyft Provide?
Uber and Lyft provide varying levels of insurance coverage during these three periods.
- Period One: During this time, rideshare companies typically offer limited liability coverage but no collision or comprehensive coverage. Uber, for example, provides liability coverage of $50,000 per person for bodily injury, $100,000 per accident, and $25,000 for property damage. However, this coverage only applies if your personal auto insurance does not cover you during this time.
- Period Two: Once a driver accepts a ride request, Uber and Lyft’s commercial insurance policies kick in. During this period, both companies provide $1 million in liability coverage. This is designed to protect the driver from claims involving injury or property damage caused during this stage of the ride.
Additionally, during this period, there is contingent collision and comprehensive coverage, which covers damage to the driver’s vehicle. However, this is subject to a deductible. For Uber drivers, for instance, the deductible is $2,500.
- Period Three: While you have a passenger in the car, rideshare companies offer the highest level of coverage. Uber and Lyft both provide $1 million in liability coverage as well as uninsured/underinsured motorist coverage. Like in Period two, there is also contingent collision and comprehensive coverage, but again, drivers must meet the deductible before this insurance kicks in for vehicle damage.
What’s Not Covered?
Despite the coverage offered by Uber and Lyft, there are gaps in protection that drivers need to be aware of. For example:
- Period One Risks: If you’re logged into the app but haven’t accepted a ride, your personal auto insurance will likely not cover you because you are technically using the vehicle for commercial purposes. While rideshare companies provide liability coverage, it does not include collision or comprehensive coverage for your vehicle. This means if you’re involved in an accident during this time, repairs to your car may not be covered unless you have specific rideshare coverage.
- Personal Property: If personal items in your car are damaged or stolen during a ride, they generally aren’t covered by Uber or Lyft’s policies.
- Mechanical Issues: General wear and tear or mechanical failures that occur during rideshare driving are not covered by the insurance offered by the platforms.
The Importance of Rideshare-Specific Insurance
To address these coverage gaps, many insurance providers now offer rideshare-specific insurance policies. These policies are designed to fill in the gaps left by your personal auto insurance and the coverage provided by Uber or Lyft. Rideshare insurance can ensure that you are protected during Period one when you are waiting for a ride request, and it can offer more comprehensive coverage overall, including for collision and comprehensive damage.
Many major insurance companies, including Allstate, Geico, State Farm, and Progressive, offer rideshare coverage that either extends your personal auto policy to cover ridesharing activities or adds supplemental protection for the times when you are using the rideshare app but not actively driving a passenger.
How to Protect Yourself
If you’re a rideshare driver, here are a few steps you can take to protect yourself:
- Review your personal auto insurance policy: Ensure you understand your current policy’s exclusions. In most cases, personal auto policies do not cover commercial activities like ridesharing.
- Consider rideshare insurance: Purchasing a rideshare-specific policy can fill the gaps left by both your personal auto insurance and the coverage provided by Uber or Lyft.
- Keep track of deductible requirements: If you’re relying on the contingent coverage provided by the rideshare companies, remember that you’ll need to cover the deductible for any collision or comprehensive claims.
- Document everything: In the event of an accident, make sure you have thorough documentation, including photos of the damage, a police report, and any correspondence with Uber, Lyft, or your insurance company.
Contact Attorney Joshua E. Palmer in Macon Today
Rideshare drivers in Macon face unique insurance challenges that require careful planning and attention. While Uber and Lyft provide a certain level of protection, their coverage may not be enough in all situations.
By understanding the different periods of ridesharing and obtaining rideshare-specific insurance, you can ensure that you are fully protected while on the job. Whether you’re logging into the app or driving a passenger to their destination, being aware of your coverage limits will give you peace of mind and keep you protected on the road. Contact us today for more information on liability for rideshare drivers.
