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A note on the pandemic: Amid the COVID-19 pandemic, many insurance companies are expanding coverage to automatically include a driver’s personal vehicle when delivering food, medicine and other essentials for a delivery business . For more information see NerdWallet Guide to Coronavirus and Auto Insurance.
Insurance for Uber and Lyft drivers – in addition to coverage from these companies – is the best way to be fully covered on the job. Often referred to as carpooling insurance, these hybrid policies include coverage for personal automobile use and for times when drivers are logged into a rideshare app but not covered by Lyft or Uber insurance. .
Drivers at on-demand delivery companies like Grubhub, Instacart, and Uber Eats also need ridesharing insurance to avoid a coverage gap.
Why delivery drivers, Uber, and Lyft need rideshare insurance
You need ridesharing insurance in any situation where you’re driving your car to make money, whether you’re driving for ridesharing companies like Uber or Lyft, or an app-based delivery service.
Not only is your personal auto insurer unlikely to cover accidents that happen during your ride-sharing gig, they might even void your policy if they find out that you haven’t disclosed that you’re driving the car for fun. silver. Even if you have coverage from the company you’re carpooling for, it probably won’t apply for the duration of your work.
Carpool insurance is not available everywhere. If you can’t get it, you would need a commercial insurance policy to be fully insured and to avoid being abandoned by your carrier. These plans have higher liability limits than typical policies – and corresponding higher prices. According to the Trusted Choice insurance agent group, the average commercial policy for a passenger vehicle costs $ 1,200 to $ 2,400 per year or more.
Lyft and Uber Insurance
Uber or Lyft insurance provides minimal coverage while you have the app activated and wait for a claim – known as Period 1. More comprehensive coverage kicks in after you agree to a claim. journey and you are carrying passengers.
Here’s how carpooling insurance periods (sometimes called “phases”) work:
- Period 0: The application is deactivated. Your personal policy covers you.
- Period 1: The application is activated; you are waiting for a request for carpooling. Personal auto insurance without carpooling coverage does not cover you. Your employer’s carpooling policy is limited to Liability coverage.
- Period 2: Request accepted and you are on your way 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 amounts deductible for comprehensive and collision insurance are different. A deductible is your share of the repair costs before your insurer pays the remainder of a claim. Lyft’s deductible is $ 2,500, while Uber’s is $ 1,000.
Lyft and Uber insurance by period
Carpool insurance for drivers of delivery applications
If you drive for an on-demand delivery service that offers auto insurance, check their policy carefully – coverage differs from company to company and is limited in all cases.
For example, Grubhub and Instacart don’t provide any auto insurance, but you’ll need your own coverage to drive for them. Meanwhile, DoorDash only offers liability insurance while the food you deliver is in your car.
As with a ridesharing company, the insurance provided by your delivery app will depend on the time period you are in:
- Period 0: The application is deactivated. Your personal policy covers you.
- Period 1: The application is activated; you are waiting for a request. A personal policy without carpooling coverage does not cover you. Some delivery app companies offer coverage.
- Period 2: Request accepted and you are on your way to pick up a delivery. Some delivery app companies offer coverage.
- Period 3: You have the food or the goods in the car. Your employer’s policy is in full force.
Here’s a breakdown of auto insurance offered by some on-demand delivery companies:
Carpool insurance offered by delivery app companies
Where to buy carpooling insurance
Check out our calculator below to find ridesharing insurance in your state.
How much does carpooling insurance cost
A policy with carpooling coverage costs about $ 15 more per month, according to insurer websites, although some say it’s much cheaper. For example, Allstate says coverage can be as cheap as around $ 20 a 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 look at some that do.
Carpool insurance costs per company
How to take out carpooling insurance
Rideshare insurance is either a hybrid policy or a supplement to your personal auto insurer, not stand-alone coverage. For example, you cannot have Progressive for your personal auto policy and purchase ridesharing insurance from Geico.
When choosing carpooling insurance, be sure to:
- Tell your personal auto insurer that you are driving for a rideshare company.
- Determine the gaps between your personal policy and the policy of your carpooling company. Uber and Lyft both offer million dollar liability coverage for drivers carrying passengers. Among smaller and newer companies, policies may vary.
- Ask your current insurer if they offer ridesharing insurance to fill gaps in coverage or to offer you a commercial policy. If both types are available, get both quotes so you can compare costs.
” MORE: Compare auto insurance rates
What happens if you have an accident while driving for Uber, Lyft or another app?
If you cause an accident during periods 2 or 3 – while carrying passengers or on the way to a ticket – insurance policies for Postmates, Uber Eats, Uber and Lyft will cover medical bills and other damages you cause up to $ 1 million. The $ 1 million limit is much higher than most drivers – even taxi drivers in many large cities – carry liability insurance.
If a an uninsured or underinsured driver hits you when you drive for Lyft or Uber, the amount covered by their policy varies by state. No delivery company offers coverage for this situation.
You can also shoot full coverage and collision with ridesharing companies and Uber Eats, but only if you also have such coverage in your personal policy. Be warned though: deductibles can be high and policies only apply after you’ve accepted a request or while you are carrying passengers or food.
If you cause an accident in Period 1, you will need to file a claim with your insurance provider, unless your state law or rideshare insurance policy provides otherwise. If the claim is denied or you aren’t fully reimbursed, insurance from Lyft or Uber (for Uber and Uber Eats drivers) should cover the rest. But the limits for ridesharing companies in these cases are relatively low – that’s the “void” that your personal operator’s ridesharing insurance is designed to cover.
How to report an accident and file a claim
Call the police. Whether or not you are in carpooling mode when car accident happens, your first step should be to call the police. Depending on the type of accident and the rules of your rideshare company, you may need to provide your personal proof of insurance or the rideshare company’s certificate. Exchange information with the other pilot as you normally would.
How to deposit. Then notify your personal auto insurer. Even if you can count on your employer to cover the damage, your personal insurer will be informed of any accident, and it is best that they hear it from you. Drivers who have not been honest about their driving status can find themselves in a difficult situation: if you choose not to notify your insurer, you risk being abandoned.
Finally, let your rideshare company or employer know about the delivery app. If you can take advantage of the company’s coverage, a representative can help you start the claims process.