Being a ride-share driver comes with many risks, driving around for hours open you up to possible collisions, accidents, and legal suit actions. Most insurance policies do not handle ride share issues, so you must take out a focused policy. Some states don’t have ride-share insurance, so you must check if your state has one. We add a table of statewide rideshare insurance brokers at the end of this article. Food for thought, the more you are on the road, the higher the risk of being involved in an accident or being sued for whatever reason the passenger thinks.
What is a ride-share insurance policy?
Rideshare insurance or ride-share friendly insurance is a specific insurance focused on ride-share driving, which is not normal driving. Ride-share driving is a professional process that requires definitive coverage, and this coverage is defined by Periods.
What are Periods?
You will come across the terms period 1, period 2 and period 3, these are:
- Period 1: When your car is online, standing still or driving but without a fare.
- Period 2: This starts from the moment you accept a call until you reach the pickup point.
- Period 3: Starts from the moment the passenger enters the car until you drop them off at the drop off point.
The ride-share friendly policy
The point of most risk is Period 1, which is uncovered. A rideshare friendly policy covers you during period 1. Uber covers you during periods 2 and 3, but there is a $1,000 Uber collision fee payable so that a friendly ride-share policy will include a collision waiver clause.
Current standard insurance coverage:
Many drivers hide the fact that they are ride-share drivers. When they do need to activate their policy claims the find that it is null and void. In some cases, when insurance company’s find out you are an Uber driver they will drop your policy, or they will demand a higher premium payment rate.
Uber insurance issues
Uber (and Lyft) do not provide collision coverage during period 1, and at most provide very low liability limits. Drivers must get overage for Period 1 to allay the risks they face during this period. If you do not have ample coverage for the period 1 you will have to:
- Pay all the repairs, that’s 100% out of your pocket.
- Pay the excess liability. Uber covers $25,000 for the property, $50,000 per persons and only $100,000 for injury claims. Anything awarded above these amounts will come out of your pocket.
Rideshare Friendly Policies
There are three types of rideshare friendly policies available today, they include:
- Period 1 coverage
- Rideshare personal policies
- Commercial-type coverage
Period 1 coverage
These additions to the Uber Period 1 coverage plan offer personal insurance extended to period 1. Since rideshare companies and some states offer contingent period one liability coverage, this would be a good choice since it adds full collision coverage for period 1. The companies that offer this full type of coverage include Farmers, Metromile, USAA, and Travelers.
Rideshare personal policies
Sometimes its best to sit with your insurance broker, and most of us have one and discuss the creation of a personal policy. Most insurance companies offer different versions of ride-share coverage, so it will be easy for the broker to manipulate the various options and create a ride-share specific policy that meets your requirements. This option will also give you far more coverage and control over what is covered and how much it protects you.
You can always opt for a standard commercial ride-share policy. Insurance companies such as Geico, Progressive, and Erie offer similar products that cover Periods 2 and three as well as complimentary additions to period 1. Since Uber and Lyft provide insurance products covering periods 2 and 3, having a double coverage will increase your security and ease your mind.
Some states demand you have a period one liability insurance coverage. Period 1 insurance coverage is a good demand since it personally protects you.
Make sure you have full coverage, not for legal reasons, but for your safety and security. The last thing you want is to wake up after an accident and find out you are personally liable for hundreds of thousands of dollars.
List of commercial ride-share insurance companies with states: