Rideshare insurance fills the coverage gaps between your personal auto policy and the commercial insurance provided by Uber and Lyft. Without it, you risk paying out of pocket for accidents that occur while you’re logged into the driver app but haven’t accepted a ride yet.
What Is Rideshare Insurance?
Rideshare insurance is specialized auto coverage designed for drivers who work for transportation network companies like Uber and Lyft. Your standard personal auto insurance won’t cover you while you’re driving for business purposes. Rideshare insurance bridges this gap.
Most personal car insurance policies exclude coverage when you use your vehicle for commercial activities. The moment you turn on the Uber or Lyft app, your personal policy may no longer protect you. Rideshare insurance kicks in during these periods.
You can get rideshare coverage two ways: as an endorsement added to your existing personal policy, or as a standalone commercial policy. The endorsement option costs less for most drivers.
Why Rideshare Drivers Need Special Coverage
Your personal car insurance policy likely has a commercial use exclusion. This means if you have an accident while driving for Uber or Lyft, your insurer can deny your claim. You’d be responsible for all repair costs and medical bills.
Uber and Lyft provide insurance, but only during specific periods. When you’re logged into the app but waiting for a ride request, their coverage is limited. You’re exposed during this time if you don’t have rideshare insurance.
Here’s what happens without proper coverage:
- Your personal insurer denies your claim
- Uber or Lyft’s insurance may not apply yet
- You pay thousands in damages from your own pocket
- You face potential lawsuits from other drivers
- Your driving privileges could be suspended
Insurance companies check your driving status after accidents. If they discover you were logged into a rideshare app, they’ll investigate whether you were working. Don’t risk it.
Understanding the Three Periods of Rideshare Insurance
Rideshare insurance works in three distinct periods based on your activity in the app.
Period 1: App On, Waiting for Ride Request
You’ve opened the Uber or Lyft driver app and are waiting for a passenger request. You’re available but haven’t accepted anything yet.
Coverage during Period 1:
- Uber/Lyft provides limited liability coverage ($50,000 per person, $100,000 per accident, $25,000 property damage)
- No collision or comprehensive coverage from the rideshare company
- Your personal policy typically won’t cover you
- Rideshare insurance endorsement fills this gap completely
Period 2: Ride Accepted, Driving to Pick Up Passenger
You’ve accepted a ride request and are driving to the pickup location. The passenger isn’t in your car yet.
Coverage during Period 2:
- Uber/Lyft provides $1 million liability coverage
- Contingent collision and comprehensive coverage (if you have it on your personal policy)
- Your deductible applies ($1,000 for Uber, $2,500 for Lyft)
- Better protection than Period 1, but still gaps exist
Period 3: Passenger in Vehicle
The passenger is in your car, and you’re driving them to their destination. This continues until they exit your vehicle.
Coverage during Period 3:
- Full $1 million liability coverage from Uber/Lyft
- Collision and comprehensive coverage
- Uninsured/underinsured motorist coverage
- Same deductibles as Period 2
The riskiest period is Period 1. You’re on the road, often for hours, with minimal protection. This is where rideshare insurance matters most.
What Uber and Lyft Insurance Covers
Both Uber and Lyft provide commercial insurance policies for their drivers, but the coverage varies by period.
| Coverage Period | Liability Coverage | Collision/Comprehensive | Deductible |
|---|---|---|---|
| Period 1 (App on, no request) | $50K/$100K/$25K | Not covered | N/A |
| Period 2 (Driving to pickup) | $1 million | Contingent coverage | $1,000 (Uber) / $2,500 (Lyft) |
| Period 3 (Passenger in car) | $1 million | Full coverage | $1,000 (Uber) / $2,500 (Lyft) |
The contingent coverage in Period 2 means the rideshare company’s insurance only applies if you already have collision and comprehensive on your personal policy. If you don’t, you’re not covered for damage to your own vehicle.
Lyft’s $2,500 deductible is particularly high. If you hit another car while driving to pick up a passenger, you’ll pay $2,500 before their insurance covers the rest. Most drivers can’t afford this out of pocket.
Uber and Lyft also provide uninsured motorist coverage during Periods 2 and 3, protecting you if someone without insurance hits you. This doesn’t apply during Period 1.
Top Rideshare Insurance Providers and Costs
Several major insurance companies now offer rideshare coverage. Here’s what you need to know about each.
Mercury Insurance
Mercury offers rideshare endorsements in California, Arizona, Nevada, and several other states. You add the endorsement to your existing Mercury policy.
Cost: $6-$15 per month on average Best for: California drivers looking for affordable gap coverage Coverage: Fills Period 1 gaps completely
Mercury specializes in rideshare coverage and understands the specific needs of gig economy drivers. Their claims process is straightforward.
Progressive Insurance
Progressive provides rideshare coverage in most states. They were one of the first major insurers to offer this protection.
Cost: $10-$20 per month depending on your state and driving record Best for: Drivers who want national coverage Coverage: Comprehensive Period 1 protection plus additional options
Progressive lets you customize your rideshare coverage. You can add higher liability limits if you want extra protection.
GEICO Rideshare Insurance
GEICO offers rideshare endorsements but availability varies by state. Check your local GEICO agent for details.
Cost: $8-$18 per month Best for: Existing GEICO customers Coverage: Period 1 gap coverage with flexible options
GEICO’s rideshare coverage integrates with their standard policies. If you already use GEICO for personal auto insurance, adding the endorsement is simple.
Allstate Rideshare Insurance
Allstate provides rideshare coverage through their standard auto policies in participating states.
Cost: $12-$25 per month Best for: Drivers who want full-service insurance Coverage: Period 1 protection plus enhanced liability options
Allstate offers higher coverage limits than some competitors. If you drive in busy urban areas with expensive cars on the road, this extra protection helps.
State Farm Rideshare Insurance
State Farm’s rideshare endorsement covers you during all three periods with enhanced protection.
Cost: $10-$22 per month Best for: Part-time drivers who want comprehensive coverage Coverage: Full gap coverage plus optional enhancements
State Farm is one of the most reliable insurers for claims processing. Their rideshare program includes 24/7 support.
The actual cost of rideshare insurance depends on your driving record, vehicle type, coverage limits, and location. Expect to pay between $100-$250 per year on average.
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How to Add Rideshare Coverage to Your Policy
Adding rideshare insurance to your existing auto policy takes about 15 minutes. Here’s the process.
Step 1: Contact Your Insurance Company
Call your current auto insurer and ask if they offer rideshare coverage in your state. Not all companies provide it, and availability varies by location.
If your current insurer doesn’t offer rideshare coverage, you’ll need to shop around. Don’t cancel your current policy until you have new coverage in place.
Step 2: Provide Driving Information
Your insurer will ask about your rideshare activities:
- Which platform you drive for (Uber, Lyft, or both)
- How many hours per week you drive
- What times you typically work
- Your driving history and record
Be honest about your rideshare work. Failing to disclose this can void your entire policy if you have an accident.
Step 3: Choose Your Coverage Level
Decide what coverage limits you need beyond the basic endorsement:
- Higher liability limits (recommend $300,000 or more)
- Lower deductibles for collision coverage
- Additional uninsured motorist protection
- Rental car reimbursement while your car is being repaired
Most drivers stick with the standard endorsement, which covers Period 1 gaps. This is usually sufficient unless you drive full-time.
Step 4: Review and Purchase
Your insurer will provide a quote showing your new premium with the rideshare endorsement added. The increase is typically small compared to the protection you gain.
Your coverage starts immediately after you pay. You’ll receive updated insurance cards showing your rideshare coverage. Keep digital copies on your phone.
Step 5: Notify Uber and Lyft
Upload your new insurance information to both platforms. They require proof of rideshare coverage in many states.
Update your insurance documents in the driver app within 30 days. Some cities and states require rideshare insurance by law, and you can’t drive without proper documentation.
State Requirements for Rideshare Insurance
Insurance requirements for rideshare drivers vary by state. Some states mandate rideshare coverage, while others leave it optional.
States Requiring Rideshare Insurance:
- California
- Colorado
- Maryland
- Massachusetts
- North Carolina
- Washington
These states require transportation network companies to verify that drivers carry adequate insurance. You must show proof of rideshare coverage to drive legally.
States with TNC Insurance Laws: Most states now have transportation network company laws that set minimum insurance requirements for rideshare platforms. These laws force Uber and Lyft to provide the Period 2 and 3 coverage mentioned earlier.
However, these laws don’t always require drivers to carry their own rideshare insurance for Period 1. That’s still your responsibility.
Local City Requirements: Some cities impose additional insurance requirements beyond state laws. New York City, Chicago, and Los Angeles have stricter rules for rideshare drivers.
Check your local regulations before you start driving. Operating without proper insurance can result in fines, license suspension, and legal problems if you have an accident.
Common Rideshare Insurance Mistakes to Avoid
Many rideshare drivers make insurance errors that cost them money or leave them exposed. Here are the biggest mistakes.
Mistake 1: Not Telling Your Personal Insurer
Some drivers hide their rideshare work from their personal auto insurer to avoid higher premiums. This is insurance fraud and can void your entire policy.
If you have an accident and your insurer discovers you were driving for Uber or Lyft, they’ll deny your claim. You’ll pay for all damages yourself, potentially tens of thousands of dollars.
Mistake 2: Assuming Uber/Lyft Coverage Is Enough
Uber and Lyft provide insurance, but their Period 1 coverage is minimal. Most drivers spend significant time in Period 1, waiting for ride requests.
One accident during this time could bankrupt you without proper rideshare insurance. The $50,000 liability limit won’t cover serious injuries or multiple-vehicle accidents.
Mistake 3: Choosing the Cheapest Option Without Comparing
The lowest-priced rideshare insurance isn’t always the best value. Compare coverage limits, deductibles, and claim service quality.
Some cheap policies have high deductibles or exclude certain types of coverage. Spending an extra $5-$10 per month can save you thousands in a claim.
Mistake 4: Not Updating Your Coverage
If you increase your driving hours or switch from part-time to full-time rideshare work, your insurance needs change. Notify your insurer immediately.
Full-time drivers face more risk and may need a commercial policy instead of just an endorsement. Using the wrong coverage type can result in denied claims.
Mistake 5: Forgetting to Turn Off the App
Every minute your rideshare app is on, you’re potentially exposed if you lack proper coverage. Turn off the app when you’re done driving.
Some drivers leave the app running “just in case” they get a good ride request. This extends your Period 1 exposure time unnecessarily.
Mistake 6: Not Reading Your Policy
Many drivers don’t understand what their rideshare insurance actually covers. Read your policy documents carefully and ask questions.
Know your deductibles, coverage limits, and exclusions. Understanding your policy prevents surprises when you file a claim.
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Frequently Asked Questions
Does my personal car insurance cover me while driving for Uber or Lyft?
No, your personal car insurance policy typically excludes coverage when you use your vehicle for commercial purposes like ridesharing. The moment you turn on the Uber or Lyft driver app, your personal policy may no longer protect you. You need rideshare insurance to fill this gap, especially during Period 1 when you’re waiting for ride requests. Without it, you could face denied claims and pay for accident damages entirely out of pocket.
How much does rideshare insurance cost per month?
Rideshare insurance typically costs between $6 and $25 per month as an endorsement to your existing auto policy, depending on your state, insurance provider, and driving record. Most drivers pay around $10-$15 monthly for basic coverage that fills the Period 1 gap. Annual costs range from $100 to $250 for standard rideshare endorsements. Standalone commercial policies cost more—often $200-$500 per month—but most part-time drivers don’t need these.
What are the three periods of rideshare insurance?
Period 1 covers when your app is on but you haven’t accepted a ride (limited liability from Uber/Lyft, no collision coverage). Period 2 covers when you’ve accepted a ride and are driving to pick up the passenger ($1 million liability, contingent collision with $1,000-$2,500 deductible). Period 3 covers when the passenger is in your vehicle ($1 million liability, full collision and comprehensive coverage). The biggest coverage gap occurs during Period 1, which is why rideshare insurance is critical.
Can I get rideshare insurance if I drive for both Uber and Lyft?
Yes, most rideshare insurance policies cover you regardless of which platform you’re using. When you add a rideshare endorsement to your personal auto policy, it applies whether you’re driving for Uber, Lyft, or both. You don’t need separate policies for each platform. Just inform your insurance company that you drive for both services when you purchase coverage, and make sure both companies have your updated insurance information on file.
What happens if I have an accident during Period 1 without rideshare insurance?
If you have an accident while your rideshare app is on but you haven’t accepted a ride yet, and you don’t have rideshare insurance, you face serious financial consequences. Your personal insurance company will likely deny your claim because you were using your vehicle for commercial purposes. Uber or Lyft’s limited Period 1 coverage ($50,000/$100,000/$25,000 liability) won’t cover damage to your own vehicle. You’ll pay for all repairs, medical bills, and potential lawsuits from your own savings, which could amount to tens of thousands of dollars.
