Importance of rideshare insurance
The ride sharing industry is growing and continues to expand. This means that, in theory, the demand for rideshare insurance should also be growing. But that is not the case, in fact about 90% of drivers who are part of Uber or Lyft do not have rideshare insurance.
Why is this such a big deal? Well, rideshare and insurance companies see a few different phases of ridesharing. They are the following:
Period 0: Your application is offline and you are covered by personal auto insurance
Period 1: Your application is online, awaiting applications. Your personal auto insurance does not cover you at this time, nor does insurance purchased through the rideshare company.
Period 2: You have received an application and if you have insurance through Uber and Lyft, you are now covered.
Period 3: He now carries passengers and is covered by the ride-sharing company’s policy.
So as you can see there is a gap where it would not be covered. If an accident occurs during Period 1, you could be stuck paying 100% of the damages. But that’s not the only reason you should consider getting rideshare insurance.
Without rideshare insurance, you risk having your personal auto insurance coverage canceled by your insurer. The reason is that you must specify that you are using your car to earn money because it is not covered by traditional car insurance. After you are discharged, your premium will increase significantly since you are now considered high risk.
Another potential hurdle is that not all states offer rideshare insurance yet. Prices also vary from state to state and company to company, so make sure you get about three rideshare insurance quotes to ensure the best deal for your needs.
However, the good news is that there are many options to ensure that you are properly covered. You need a policy of some form as you are technically using your vehicle for business use as you are making money driving. So with that said, if your state doesn’t offer rideshare insurance or if it’s a better fit, you can opt for commercial auto insurance.
There is also the option to purchase Period 1 coverage to bridge the gap in insurance you may already have directly from Uber or Lyft. Some insurance companies even offer a deal where they won’t let you in as long as you disclose that you’re a rideshare driver. The only drawback is that you won’t be covered while your application is online, so experts recommend that you only use this option if you don’t move around a lot while waiting for applications and if you have insurance from the rideshare company. Also, be sure to check with your insurance provider that this is the case to avoid a situation where you are left behind, at all costs.
Ultimately, it comes down to a few things, one of which is the law of your state. As states have laws about personal auto insurance, many are also adding laws about rideshare insurance and the minimum coverage you need. This should be a main motivating factor. In addition, you should consider how you plan to handle an accident of any scale during Period 1 of a driving session. As mentioned above, you could easily wipe out your bank account without careful consideration.
Therefore, as a rideshare driver or if you plan to become one, it is crucial to shop for rideshare insurance. Although your premium may increase slightly, it is affordable, especially in relation to having to pay all the damages from an accident. Also, many insurance companies allow you to add to an existing car insurance policy instead of issuing an entirely new one, which is extremely beneficial to you as a customer. Therefore, in general, it is not only vital, but also worthwhile to have rideshare insurance.