When you sign up as a rideshare driver for Uber, Lyft, or any company that has you transport customers or goods for money, you may need to purchase rideshare insurance. If you have a car accident while driving for one of these companies and you do not have carpooling insurance, your automobile liability insurance the policy may not cover the cost of damage, and you may even see your coverage dropped.
A lot of best car insurance companies offer carpool insurance policies in most states. If you’re considering a rideshare policy or need to sign up with an insurer that offers rideshare coverage, enter your postcode above to get free, no-obligation quotes from some of the insurers we recommend at Home Media Evaluation Team.
What is carpooling insurance?
Rideshare insurance is a specific type of commercial auto insurance policy designed for people who drive for ridesharing or food delivery services such as Uber, Lyft, DoorDash, and Postmates.
Insurance coverage for carpooling
The list below outlines some key features that are typically specific to ridesharing insurance coverage, which we will discuss in the next section:
- May not be required by law
- Different from standard commercial cover
- Fills a gap in standard coverage
- Meets the specific coverage needs of rideshare drivers
How does carpooling insurance work?
Rideshare insurance works like a form of commercial insurance. He fills coverage gaps that are specific to the needs of those working in the ridesharing industry.
Carpool company insurance
Many ride-sharing companies (including Uber and Lyft) offer the following insurance coverages to their drivers:
Is carpooling insurance compulsory?
This means that you may not be legally required to carry rideshare insurance, as you will already have the state minimums required when driving for one of these services.
Carpool Commercial Insurance
That said, since minimum liability coverage does not apply during the “app on” period spent working in the ridesharing industry, rideshare drivers need commercial coverage. Standard commercial auto insurance policies are generally reserved for large corporations. These policies are designed to cover a fleet of vehicles or vehicles used exclusively for business purposes. As such, it generally doesn’t make sense for someone who occasionally drives for Uber to purchase this type of policy.
What does carpooling insurance cover?
Rideshare insurance, which often comes as an addendum to one’s existing car insurance policy, fills in coverage gaps left by existing gaps in minimum liability insurance, carpooling company insurance carpooling and standard commercial insurance. Rideshare insurance extends specific coverages on rideshare drivers’ personal policies so that drivers are covered during the activation period of the app.
Do you need carpooling insurance?
Due to the potential consequences of driving without rideshare insurance, you will need a commercial insurance policy if you use your car to earn income (beyond driving to and from your workplace).
In the case of driving for personal use, standard civil liability, multi-risk or collision damage waiver policy is in effect. As soon as you activate the Uber or Lyft app to start accepting riders, a standard personal auto insurance policy will no longer cover you for damages.
If you are involved in an accident while driving for a rideshare service, the rideshare company’s commercial policy must cover damage to the other driver’s vehicle. In accidents where you are the driver at fault, your own insurer may not cover the cost of damage to your vehicle, even if you have comprehensive and collision insurance policies.
The ride-sharing company may have a collision insurance policy that pays to repair your vehicle, but it’s likely to come with a high deductible. Uber and Lyft drivers, for example, have full coverage while en route for a ride request and when transporting a customer. But that coverage includes a whopping $2,500 deductible. Uber coverage also doesn’t apply while you’re parked, so if a tree branch falls on your hood and crushes your car while you’re waiting to pick up a customer, you’re out of luck. If you are parked and have the Uber app activated, neither your own standard comprehensive policy nor Uber’s coverage will pay for repairs.
In the worst case, you could lose your insurance cover or see your premium increase if it turns out that you used your car for business purposes without informing your insurer. Reinsuring after an event like this will cost a lot more than paying for carpool coverage every month.
Cost of carpooling insurance
Companies like Geico, Progressive, USAA, and Allstate all offer ride-sharing insurance for as little as $6 per month. Yours auto insurance quote will vary depending on your insurance profile, but for most drivers the cost is less than $30 per month for rideshare auto insurance.
Rideshare insurance is significantly less expensive than commercial auto insurance. Indeed, it is intended for people who only use their personal vehicle part-time for commercial purposes.
Add carpooling insurance
Since rideshare insurance is typically offered as a form of spread or supplemental coverage, the process of obtaining rideshare insurance is somewhat different from purchasing standard personal or business insurance. This process is described in detail in the sections below.
Can I buy insurance just for carpooling?
Since most providers don’t offer rideshare car insurance coverage, you probably won’t be able to purchase rideshare insurance as a standalone policy.
Additional carpooling insurance
Some insurers sell ride-sharing coverage as a policy top-up or rider to an existing policy. This provides coverage for a particular type of commercial use to drivers who do not necessarily run a large-scale business.
Ridesharing Insurance Companies
Here are some of the best ridesharing insurance companies:
- Geico carpooling insurance
- Progressive carpooling insurance
- USAA Rideshare Insurance
- Allstate Rideshare Insurance
- State Farm Rideshare Insurance
- Farmer carpool insurance
How to Compare Rideshare Insurance Quotes
To get carpool insurance, simply contact your insurer and ask about coverage. Many providers will allow you to add carpool coverage to your existing policy for a low monthly cost. Use the tool below to compare car insurance cost options from several leading insurers in your area.
Carpooling car insurance: conclusion
In this article, we have discussed the ins and outs of ridesharing insurance. In addition to the legal requirements, we’ve explained the unique features of the cost, coverage, and purchase process for rideshare coverage.
Best carpool insurance
If you’re happy with your current auto insurer, contact an agent to inquire about ride-sharing insurance. The easiest way to get coverage is to add it to your existing policy. If you don’t already have insurance or your insurer doesn’t offer carpooling coverage, you might consider switching providers.
Geico carpooling insurance
Geico offers ride-sharing insurance coverage that replaces your Geico Policy. By converting your personal policy to a carpool policy, you will be covered by the same insurance whether the carpool app is activated or not. This is required for Geico customers who drive for any ride-sharing service.
USAA Rideshare Insurance
The USAA offers what it calls “carpool gap coverage.” This is a top-up policy that provides protection for coverage gaps between your automatic policy and coverage provided by an app-based transportation network company (TNC) such as Uber or Lyft. Most TNC insurances do not cover your vehicle when the app is activated, but when you are parked and waiting for transport requests. This policy can also help cover the high deductible of the TNC-sponsored policy.
Compare USAA with Geico head to head in our USAA vs. Geico exam.
Carpooling insurance: FAQ
Because consumers rely on us to provide unbiased and accurate information, we’ve created a comprehensive rating system to formulate our ranking of the best car insurance companies. We’ve collected data on dozens of car insurance providers to score companies on a wide range of ranking factors. The end result was an overall score for each provider, with insurers who scored the most points at the top of the list.
Here are the factors taken into account by our assessments:
- Cost (30% of total score): Auto insurance rate estimates generated by Quadrant Information Services and discount opportunities were both taken into consideration.
- Coverage (30% of total score): Companies that offer a variety of insurance coverage choices are more likely to meet consumer needs.
- Reputation (15% of total score): Our research team considered market share, industry expert ratings, and years in business to assign this score.
- Availability (10% of total score): Auto insurance companies with greater state availability and fewer eligibility criteria scored higher in this category.
- Customer experience (15% of total score): This score is based on volume of complaints reported by the NAIC and customer satisfaction ratings reported by JD Power. We also considered the responsiveness, friendliness and helpfulness of each insurance company’s customer service team based on our own customer analysis.
*Data correct at time of publication.