Ridesharing is a good way to make extra money, set your own schedule, and meet some interesting people in the process. Yet, it’s also important to understand what kind of financial protection you need for this kind of job.

With this in mind, let’s breakdown how the coverages work when you do ridesharing both from your insurance end and the company’s.

Your Insurance Requirements and the Ridesharing Effect

When you sign up for Uber or Lyft, one of the requirements is to supply proof of your car insurance showing you as the primary driver of the vehicle you want to use. In addition, you’ll need to have the minimum coverage amounts mandated by state law.

That said, some insurance companies can track driving behaviors through software or hardware–think Progressive’s Snapshot as an illustration. Therefore, if you have one of these devices in your vehicle, it’s going to register how many miles you drive on a daily basis.

And the more you drive, the more risk you present to your insurance provider. This might result in you paying a little bit more for insurance.

How Does Uber’s Insurance Work?

Rideshare companies offer tiered coverages based on what you’re doing at the time. To demonstrate, if you have the Uber app activated and are waiting for a ride request, Uber’s liability insurance covers any damage you caused during an at-fault accident (up to $25,000) and pays for the medical bills of anyone affected by crash up to $50,000 per person.

Meanwhile, if you accepted a trip and are on your way to pick the rider up, Uber protects you three different ways:

  • Third-party liability coverage: Uber insures you for injuries caused to other riders or pedestrians or damage to property for up to $1,000,000.
  • Collision and comprehensive coverage: This coverage comes with a provision–you must have the same coverage on your personal insurance–if you do then it will cover the damage to your car up to its market value.
  • Uninsured/underinsured motorist bodily coverage: If another driver hits your vehicle and doesn’t have insurance or does a hit or run, this policy covers you up to $250,000 in damage to property and/or medical bills.

How Does Lyft’s Insurance Differ from Uber’s?

Similar to Uber, Lyft’s insurance gives you tiered coverages based on whether you’re waiting for a rider or you’re on your way to pick him or her up. One of the main differences between the two concerns deductibles for contingent collision and comprehensive coverages.

For Uber, you’ll pay a $1,000 deductible whereas for Lyft you’ll pay $2,500. This is an important factor to consider since the deductible is the amount you must pay before insurance pays their share.

Do I Need Ridesharing Insurance?

Ridesharing insurance bridges the gap between your personal and your ridesharing company’s commercial policies to ensure you have all the financial protection you need. Why would you need this? Because ridesharing companies offer low coverages in the event you’re in an accident while waiting for a rideshare request and your personal insurance denied the claim. This creates a bubble whereby you need added protection to cover you if medical or property expenses are high.

Along with considering ridesharing insurance, talk to an independent Cole Harrison agent to see how we can simplify the insurance process for you.

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