When you drive your personal car, your personal auto insurance gives you the security assurance you require. If you are an Uber driver, it provides you with Uber Insurance. But, there are a lot of loopholes and voids which remain unaccounted. For example, if you own personal auto and you rent it out for Uber or Lyft. These types of situation lie in the grey area of insurance policies, which create problems during claims. Moreover, Uber Insurance doesn’t cover you when the app is off. Under such circumstances, Rideshare Insurance comes to your rescue.
To give you a basic idea of how Rideshare Insurance works, let us introduce the concept of the 4 periods.
- Period 0: In this period, the app is off. Your Personal Auto Insurance policy covers you during this.
- Period 1: Here, the app is on. Uber and Lyft Insurance policy cover you, but the coverage Is limited liability coverage. Personal auto insurance without rideshare insurance doesn’t cover you.
- Period 2: This period starts as soon as you accept the rider’s request. You are en route to the rider’s destination and your Rideshare Insurance is in action.
- Period 3: The rider is in your car. Rideshare insurance is still in full play.
Now let’s answer some pre-requisite questions you might be having, as to why you should opt for Rideshare Insurance.
WHAT DOES UBER INSURANCE COVER?
During Period 1, Uber Insurance covers 4 basic aspects.
- Insurance cover (limited to liability coverage)
- Liability- $50,000 per person bodily injury, up to $100,000 per incident, and $25,000 for property damage.
- Collision and Comprehensive- Uber doesn’t offer collision and comprehensive coverage during Period 1. If you don’t have Personal auto insurance, you’ll have to pay the cost of the damages by yourself.
Uninsured/underinsured motorist- Uber doesn’t offer this coverage in Period 1 either.
However during phase 2 and 3, Uninsured/underinsured motorists are offered a $1 million. Liability is also well-covered. However, the Collision and Comprehensive policy is contingent. This means that if your insurer denies your claim, Uber insurance will step up. The deductible for this policy is $1000.
To read in detail about Uber Insurance, click here.
WHAT DOES PERSONAL AUTO INSURANCE OFFER?
Personal auto insurance does not cover you if you use your car as a part-time taxi. Commercial auto insurance is required for that, which usually costs an extra $5000 to $8000 a year.
HOW MUCH IS COVERED IF UBER/LYFT DRIVERS MEET WITH AN ACCIDENT?
If you meet with an accident while you are in Period 2 or 3, both Uber and Lyft driver get medical and other damages up to $1 million.
Furthermore, even if the fellow driver is uninsured or underinsured, Uber offers coverage up to $1 million. In the case of Lyft, the coverage depends from state to state.
The benefit of Rideshare Insurance kicks in when you need Collision and Comprehensive coverage. Although, the policy only applies when you’ve accepted a ride. Moreover, deductibles can be pretty high.
RECOMMENDED INSURANCES FOR RIDESHARE DRIVERS
There are 3 basic rideshare insurances that you ought to have.
This insurance is mandatory in almost every state. Liability covers the medical and property damage which you cause to a driver. Moreover, additional liability coverage is also quite inexpensive.
Collision pays to repair or replace your vehicle, in case you meet with an accident with another. Comprehensive on the other hand, pay for damages caused by reasons such as hail, fire, vandalism or animal strike. This insurance is not compulsory in any state, but it is definitely a necessity.
- Uninsured/Underinsured motorists
If you meet with an accident with a driver who doesn’t have insurance or his/her auto insurance has low limits, this will be your savior. Furthermore, choose coverage amounts that match your own liability Limits.
In addition to these, you should also consider these additional Rideshare insurances.
- Gap insurance
If your new car is putting on a lot of miles and it gets totaled, the insurance company will only pay you the actual cash value of your car. Gap insurance helps fill this gap.
- Medical Payments
If you don’t have health insurance, medical insurance is a brilliant idea for you.
HOW MUCH RIDESHARE INSURANCE COSTS?
On average, Rideshare insurance costs $15 in addition to your auto insurance policy. Some companies also charge 15-20% more for your rideshare policies, excluding personal auto policies.
Rideshare insurance is just an add on to your Personal Auto insurance policy and reaps a lot of benefits. It is a smart investment for the people looking to rent their cars like Uber and Lyft, to earn something by the side