If you drive for Uber, Lyft, or any other rideshare company, your car insurance should be top on your priority list. It could be the difference between staying afloat or going out of business whenever your car is involved in an accident during a trip.
You should know if the rideshare company will cover the costs of the ugly fallout from such an incident or if they’ll watch from the sidelines. And you should also know if your auto insurance policy will cover any damages or leave you to fend for yourself.
This article intends to shed light on this subject, so you can make informed decisions about your insurance before hitting the road for the next trip. The scenarios outlined below play a crucial role in defining the scope of your car insurance.
Phase 1
In this phase, the driver logs on to the rideshare app and waits for a ride request. Uber and Lyft would typically cover for any accident claims in the line of duty under the following provisions.
- Bodily injury coverage of $50,000 per person
- Bodily injury coverage of $100,000 per accident
- $25,000 per accident for property damage coverage
The common factor here is the glaring lack of coverage for any damage to the car, as long as it has no passengers. It becomes trickier if the driver’s insurance policy does not cover the vehicle, which is most often the case.
Due to high premiums, most drivers do not subscribe to a commercial policy for their vehicles. So they face the fallout from such incidents on their own, and it is no easy task.
Phase 2 and Phase 3
The driver will pick up passengers and take them to their destination in these phases. The insurance coverage for Uber and Lyft drivers for these phases is as follows.
- Third-party liability coverage of $1 million
- Bodily injury coverage for uninsured/underinsured motorist
- Comprehensive coverage up to the car’s actual cash value with a $1,000 deductible fee for Uber and $2,500 for Lyft.
The above implies that the rideshare company would cover any harm caused to your passengers or a third party after an accident. It would also cover your damaged car to an extent. However, it depends on having comprehensive insurance, which is a tall order for most drivers.
When do you need extra insurance?
Your auto insurance policy is typically priced on the premise that you only use your car for personal activities. However, ridesharing counts as a commercial venture, a no-go area for them at that level.
So while you can’t make any claims on accidents that happen while working, you’ll still be asked by Uber to get proof of refusal from them. This situation is a big dilemma for most drivers, and it makes the need to have extra insurance even more pressing.
The role of a Rideshare endorsement
With a rideshare insurance endorsement from your insurance auto-policy, there’s something to fall back on. You’ll get coverage for any damages your car suffers at any of the three phases previously discussed. It means that your personal auto insurance would share the demands of the claims with your ridesharing company.
So if you’re still wondering if you need extra insurance for your ride-hailing car, the answer is yes. It will come in handy when your ridesharing company leaves you in the lurch just because you haven’t picked up a passenger yet. And even when you have picked up a passenger, it will foot part of the bill that will get you and your vehicle back on track.
Contact us today if you have questions.
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