A Career In Ridesharing: What Insurance Do You Use?

In 2013, there were 5.68 million traffic accidents, as found by the U.S. Department of Transportation. Each year these accidents cost Americans hundreds of billions of dollars, with USA Today putting the total at $871 billion in economic loss and societal harm in 2010 alone. If you were in an accident tomorrow and your insurance carrier rejected your claim, could you pay for the damages?

As a rideshare motorist, your personal auto insurance plan might not cover the costs of an accident. Rideshare companies like Uber and Lyft limit the amount of insurance they are willing to take out for the protection of their drivers, and personal insurance does not cover rideshare driving. At CoverHound, we currently offer ridesharing coverage through Mercury Insurance in 5 states: Arizona, California, Illinois, Nevada and Oklahoma. This number will continue to grow as the insurance industry adjusts to the new ridesharing space.

The Professional Motorist

Not all auto insurance packages are built to provide the same amount of coverage. Even between states (auto insurance laws vary by state), what your liability package offers in financial coverage in Washington is going to be different than what is provided in Arkansas. If coverage plans can vary this much, how do you know you’re protected on the job?

Before you list yourself in the rideshare network, talk with your rideshare employer about the type of insurance packages they provide their employees and what type of driver’s license and insurance policy they expect you to have. Remember earlier how we said that auto insurance laws vary by state? Driving laws do too.

Some states require that rideshare driving professionals have a commercial driver’s license. Nolo reports that because Uber and Lyft drivers are getting paid to pick up, drive and drop off passengers, they are considered a working professional. Because they are providing customer service and have listed driving as their occupation, they must have a commercial license.

What Kind of Package Will Protect Me?

Good question. As you have probably learned in working with your insurance agent, the standard policy comes with an exclusionary clause. The exclusionary clause lists all of the potential driving scenarios in which your insurance company will not cover you. For many, this includes driving for hire. This is why it is necessary to ascertain whether or not your personal insurance will back you when you are in an accident on the job. Make sure to speak with your insurance carrier or agency to discuss your plan to drive for a ridesharing company and find out if you would be properly covered or if your policy needs to be altered. Since ridesharing itself is still new, the insurance industry is till establishing standards as to how coverages can and will be applied. The approach is not consistent from carrier to carrier, so you may need to look for a new insurance option that has proper coverage while driving for a ridesharing network.

Companies like Uber and Lyft are beginning to cover their drivers under an insurance plan, but protection is very cause specific. According to Breeze, Uber and Lyft divide their insurance coverage into three parts:

• 1. When a driver has signed into the system and is waiting to pick up a passenger
• 2. When the driver is in the process of picking up the passenger or is waiting for them
• 3. When the driver has a passenger in the vehicle

States are beginning to require that Uber and Lyft serve as their employees’ primary insurers. For part one, when a driver has been in an accident while only signed into the system, neither Uber or Lyft are required to offer insurance protection in most states (though this is changing in states like California and Colorado). For parts two and three, Uber and Lyft must serve as your primary insurer, at least in certain states. We advise that you get a personal auto insurance plan that covers you on the job, and not to rely too heavily on your ridesharing network. Companies like Über and Lyft do not have to follow the same protocol as other driving services, and are therefore able to deny your insurance claim.

Until state laws change, it’s better to rely on yourself in your professional driving career. Let CoverHound help you find an auto insurance package that will protect you at all costs. Our ridesharing option is limited, so please call us at (877) 517-0489 to see if we can cover you and to request a specialized quote.