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Rideshare Insurance for Drivers: Where to Buy It, What It Covers

June 1, 2020
Auto Insurance, Insurance
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A note about the pandemic: Amid the COVID-19 pandemic, many insurance companies are extending coverage to automatically include a driver’s personal vehicle when they are delivering food, medicine and other essentials for a delivery company. For more information, see NerdWallet’s coronavirus and car insurance guide.

Insurance for Uber and Lyft drivers — on top of those companies’ coverage — is the best way to be fully covered on the job. Often called rideshare insurance, these hybrid policies include coverage for personal auto use and for the times drivers are signed in to a ridesharing app but not covered by Lyft’s or Uber’s insurance.

Drivers for on-demand delivery companies like Grubhub, Instacart and Uber Eats also need rideshare insurance to avoid a coverage gap.

Why delivery, Uber and Lyft drivers need rideshare insurance

You need rideshare insurance in any situation where you drive your car to earn money, whether you drive for ridesharing companies like Uber or Lyft, or an app-based delivery service.

Not only is your personal auto insurer unlikely to cover any accidents that happen during your ridesharing gig, but it could even cancel your policy if it finds out you haven’t disclosed you drive the car for money. Even if you have coverage from the company you rideshare for, it likely won’t apply the entire time you’re on the job.

Rideshare insurance isn’t available everywhere. If you can’t get it, you would need a commercial insurance policy to be fully insured and avoid being dropped by your carrier. These plans have higher liability limits than typical policies — and higher prices to match. According to insurance agent group Trusted Choice, the average commercial policy for a passenger car costs from $1,200 to $2,400 a year or more.

» MORE: 1-minute read: Why rideshare insurance is a must

Lyft and Uber Insurance

Uber insurance or Lyft insurance provides minimal coverage while you have the app on and are waiting for a request — known as Period 1. Fuller coverage kicks in once you’ve accepted a ride and are carrying passengers.

Here’s how the rideshare insurance periods (sometimes called “phases”) work:

  • Period 0: App is off. Your personal policy covers you.
  • Period 1: App is on; you’re waiting for a ride request. Personal auto insurance without ridesharing coverage doesn’t cover you. Your rideshare employer’s policy is limited to liability coverage.
  • Period 2: Request accepted, and you’re en route to pick up a passenger. Your Uber or Lyft insurance policy is in full force.
  • Period 3: You have passengers in the car. Your Uber or Lyft insurance policy is in full force.

Lyft insurance and Uber insurance are almost identical. However, the deductible amounts for comprehensive and collision insurance are different. A deductible is your share of repair costs before your insurer pays the rest of a claim. Lyft’s deductible is $2,500, while Uber’s is $1,000.

Lyft and Uber insurance by period

PeriodInsurance type*
Period 1Liability only:

  • $50,000 bodily injury per person.

  • $100,000 bodily injury per accident.

  • $25,000 property damage per accident.

Periods 2 and 3

  • Liability: $1 million per incident.

  • Uninsured/underinsured: Varies by state.

  • Comprehensive and collision**: Up to the value of your car if you also have comprehensive and collision coverage on your personal policy.

*Coverage may be modified to comply with state and local laws.

**You must pay a deductible before coverage applies.

Rideshare insurance for delivery app drivers

If you’re driving for an on-demand delivery service that does offer car insurance, check its policy carefully — coverage differs from company to company and is limited in all cases.

For example, Grubhub and Instacart don’t provide any car insurance, but you’ll need your own coverage to drive for them. Meanwhile, DoorDash offers only liability insurance while the food you’re delivering is in your car.

As with a rideshare company, the insurance your delivery app provides will depend on the period you’re in:

  • Period 0: App is off. Your personal policy covers you.
  • Period 1: App is on; you’re waiting for a request. A personal policy without ridesharing coverage doesn’t cover you. Some delivery app companies offer coverage.
  • Period 2: Request accepted, and you’re en route to pick up a delivery. Some delivery app companies offer coverage.
  • Period 3: You have the food or goods in the car. Your employer’s policy is in full force.

Here’s a breakdown of the car insurance offered by some on-demand delivery companies:

Rideshare insurance offered by delivery app companies

 DoorDashPostmates*Uber Eats
Period 1No employer coverageLiability only:

  • $50,000 bodily injury per person.

  • $100,000 bodily injury per accident.

  • $25,000 property damage per accident.

Period 2No employer coverageLiability: $1 million per incident

  • Liability: $1 million per incident.

  • Comprehensive and collision**: Up to the value of your car if you also have comprehensive and collision coverage on your personal policy.

Period 3Liability: $1 million per incident
*In addition to car insurance, Postmates offers occupational medical insurance, which applies for Periods 2 and 3. **$1,000 deductible applies.

Where to get rideshare insurance

You can get rideshare insurance from many of the largest auto insurers in the country, including State FarmFarmers and Progressive. But rideshare insurance isn’t available everywhere.

See our calculator below to find rideshare insurance in your state.

How much rideshare insurance costs

A policy with ridesharing coverage costs around $15 more a month, according to insurers’ websites, although some say it’s much cheaper. For example, Allstate says coverage can be as cheap as around $20 per year. State Farm, on the other hand, says its rideshare insurance typically costs 15%-20% more than a personal auto policy without rideshare coverage.

Not all insurers share estimated rates, but here’s a snapshot of some that do.

Rideshare insurance costs by company

CompanyCost above traditional policy*
*Pricing according to insurers' websites.
**USAA is only available to military, veterans and their families.
AllstateAbout $20 per year.
Erie$9 to $15 per month.
MercuryStarting at about $27 per month.
SafecoLikely under $10 per month.
State Farm15%-20% of premium.
USAA**Starting at $6 per month.

How to buy rideshare insurance

Rideshare insurance is either a hybrid policy or an add-on from your personal auto insurer, not stand-alone coverage. For example, you can’t have Progressive for your personal auto policy and buy rideshare insurance from Farmers.

When selecting rideshare insurance, be sure to:

  • Tell your personal auto insurer you’re driving for a ridesharing company.
  • Figure out the gaps between your personal policy and your rideshare company’s policy. Uber and Lyft both provide $1 million in liability coverage for drivers carrying passengers. Among smaller and newer companies, policies can vary.
  • Ask your current insurer whether it offers rideshare insurance to fill in coverage gaps, or to quote you a commercial policy. If both types are available, get both quotes so you can compare costs.

» MORE: Compare car insurance rates

What happens if you have an accident while driving for Uber, Lyft or other app?

If you cause an accident during Periods 2 or 3 — while you’re carrying passengers or on your way to a fare — the insurance policies for Postmates, Uber Eats, Uber and Lyft will cover medical expenses and other damages you cause up to $1 million. The $1 million limit is much higher than most drivers — even taxi drivers in many major cities — carry in liability coverage.

If an uninsured or underinsured driver hits you while driving for Lyft or Uber, the amount its policy covers varies by state. No delivery company offers coverage for this situation.

You can also draw on comprehensive and collision coverage from ridesharing companies and Uber Eats, but only if you also have such coverage on your personal policy. Beware, though: Deductibles can be high, and the policies apply only once you’ve accepted a request or while you’re carrying passengers or food.

If you cause an accident during Period 1, you’ll need to file a claim with your insurance provider unless your state law or rideshare insurance policy specifies otherwise. If the claim is denied or you’re not fully reimbursed, Lyft’s or Uber’s insurance (for both Uber and Uber Eats drivers) should cover the rest. But ridesharing companies’ limits in these cases are relatively low — this is the “gap” that rideshare insurance from your personal carrier is designed to cover.

How to report an accident and file a claim

Call the police. Whether or not you’re in rideshare mode when a car accident happens, your first step should be to call the police. Depending on the type of accident and your rideshare company’s rules, you might have to provide your personal proof of insurance or the rideshare company’s certificate. Exchange information with the other driver as you normally would.

How to file. Next, inform your personal auto insurer. Even if you can rely on your employer to cover the damage, your personal insurer will find out about any accidents, and it’s best they hear it from you. Drivers who haven’t been honest about their driving status can find themselves in a tough situation: If you choose not to tell your insurer, you risk being dropped.

Finally, notify your ridesharing company or delivery app employer. If you can take advantage of the company’s coverage, a representative can help you start the claims process.

Rideshare insurance: Key takeaways

Rideshare insurance has gaps.Rideshare companies offer full insurance coverage after you’ve accepted a ride request and while you’re driving passengers only. Delivery companies’ coverage varies, but all offer less insurance than Uber or Lyft.
You probably need a rideshare policy.Drivers should look at what's covered in both their personal policies and the rideshare company's insurance. To be fully covered, you’ll probably need either rideshare insurance or a commercial auto policy.
Availability is spotty.Not all insurance companies offer rideshare insurance policies, nor is coverage available in all states. Commercial policies are more widely available.
You may risk your personal coverage.Even if your company offers full coverage during all phases of the job — before, during and after requests — your personal auto insurer could drop you if you don’t disclose that you use your car to make money.

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