Is Rideshare Insurance Required?


People who drive for a ridesharing company like Uber or Lyft can get rideshare insurance. You may already be aware that a private vehicle insurance policy does not normally cover “commercial use” of your vehicle if you drive for a ridesharing firm like Uber or Lyft. In other words, if you’re in a car accident while on the job, you might have to pay for expenditures like vehicle repairs or hospital fees for an injured individual out of pocket. The rideshare insurance is intended to bridge the gap between your auto insurance and the commercial insurance provided by the ridesharing company.

You may be driving illegally if you work for a ridesharing firm in California and haven’t renewed your insurance policy. Some ridesharing firms offer insurance to their drivers. However, be sure this particular policy covers all of the requirements. To fix that, you may want to consider purchasing insurance for your ridesharing coverage to protect it. Now the question is, is rideshare insurance required? To answer that question, let’s discuss the reason why you need rideshare insurance in the first place. 

It is recommended for those whose job includes driving customers from one location to another. 

Because relying just on your personal and business auto insurance plans will leave you exposed to periods of non-coverage, rideshare insurance gives the extra protection you need to stay financially secure at all times. 

Rideshare rides are usually not covered by personal auto insurance.

That’s because your car insurance company has calculated your rate based on the assumption that you’ll be driving yourself, relatives, and friends and that you won’t be earning money from private excursions or putting a lot of miles on your car. As a result, a rideshare driver’s auto policy is unlikely to provide coverage while on a ridesharing trip.

Remember that rideshare insurance isn’t offered in every state, so you’ll need to look into other companies to see if this supplementary coverage is available where you live. If you live in a state where ridesharing insurance is not available, you should consider obtaining business insurance to ensure that you are always financially protected.

Now that we’ve covered that let’s move on to the major question. Is rideshare insurance necessary? 

Typically, ridesharing organizations do not require insurance. Instead, ridesharing drivers can opt for this type of coverage to protect themselves in the event of an accident that results in car or property damage, as well as medical bills for themselves or a third party. Going without rideshare insurance might result in considerable financial losses due to the amount of time you spend in a car and on the road as a driver.

Whether you purchase rideshare insurance or not, it would help if you informed your car insurance provider as quickly as possible that you drive or intend to work for a ridesharing company. Don’t wait for an accident to provide this information. 

If your private vehicle insurance company discovers that you utilized your car for commercial purposes without informing them, they may choose to cancel your policy, or at the very least they will probably raise your rates to cover the new type of driving. Though it is not mandatory, it is recommended for you to have one. Better safe than sorry! 

 

Jeff Campbell

Jeff Campbell is a husband, father, martial artist, budget-master, Disney-addict, musician, and recovering foodie having spent over 2 decades as a leader for Whole Foods Market. Click to learn more about me

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