Why a rideshare driver needs a rideshare insurance policy


(Preet) #1

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.

Commercial-type coverage

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.

State Requirements

Some states demand you have a period one liability insurance coverage. Period 1 insurance coverage is a good demand since it personally protects you.

Conclusions

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:


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The main reasons for getting Ride-Share Insurance

Ride-share drivers are at constant risk during their work hours; this is due to the nature of the ride-share business. Drivers are in their cars for many hours, whether parked or driving between rides and during rides, the fact that they are in their cars is already a risk. Add to this the basic coverage they get from Uber, and you will find that Uber ride-share drivers are not fully covered. Another issue is that normal insurance will not cover ride-share driving and that to become a licensed Uber driver you need to produce an insurance card with your name registered on the card.

Ride-share insurance explained

Ride-share friendly insurance (or just rideshare insurance) is an insurance policy that covers drivers working for ride-share companies such as Uber, Lyft, and Sidecar. The insurance policy is different, it takes into account the professional status of the driver during work hours, just like a taxi drivers insurance policy.

To understand how ride-share insurance works with Uber is to understand how Uber manages its miles, Uber has three periods, and these are defined as:

  • Period 1: When the car is parked or being driven, empty and waiting for a call. (Is not covered by Uber)
  • Period 2: From the moment the driver received a call until the car reaches the pickup point. (Is not covered by Uber)
  • Period 3: Begins the moment the passenger enters the car until the passenger departs the car. (Is covered by Uber but with a $1,000 deductible and a $1 million liability and collision clause)

Ride-share friendly coverage

Since the Uber coverage is limited and with certain constraints, rideshare coverage will cover the driver for all periods and include a deductible waiver. The coverage for collision and liability is dependant on the driver’s insurance budget.

Standard insurance policies

If a driver takes out a standard insurance policy, he is not covered in any instance of ride-sharing. This means that if the driver is involved in an accident or collision, he is not covered and must take the brunt of all damages and financial upon himself.

The Uber insurance features

The user’s insurance policy doesn’t cover periods 1 and 2; we already mentioned this a few times. So if you don’t get coverage, remember that if anything happens during periods one and two, you will have to pay for all the repairs and maintenance fees. You will also cover the difference between the Uber coverage of $25,000 for property and $50,000 for personal as well as $100,000 for injuries and the excess that would be decided by the insurance companies or in court.

Rideshare Friendly Features

Three ride-share friendly policies are available, and they are:

1. Periods 1 and two clauses
2. Rideshare tailor-made policies
3. Commercial insurance coverage

Period 1 coverage

These policies are standard insurance coverage with additional clauses that cover periods 1 and 2 and rename themselves Ride-share friendly. Many companies are offering these additional clauses as well as extended offering period three coverage. We provide a list of these at the end of the article.

Rideshare tailor-made policies

Some drivers do not want a standard policy and go-to a personal agent or broker that will create a special ride-share policy suitable for their particular needs and expectations.

Commercial-type coverage

Some commercial rideshare policies are available. These commercial insurance packages are provided by Geico, Erie, and Progressive. The usefulness of a commercial package is that they make a perfect addition to the Uber coverage giving the driver double coverage will ensure they drive relaxed and sleep well at night.

State Requirements for Period 1

Certain states make period one coverage mandatory, so drivers will need to find some insurance coverage to add to Uber s basic policy.

Conclusions

It is best if you take out a comprehensive ride-share coverage plan. Even if it added to the expenses and reduced some of your income, it is worthwhile having. So that you do not need to deal with the hassle of periods 1 and two incidents and also have ample coverage to assure you of period three incidents.