What Type of Insurance Do You Need as a Rideshare Driver?

Posted on Apr 27, 2019
What Type of Insurance Do You Need as a Rideshare Driver?

Rideshare drivers have unique insurance needs and often find out, too late, that their existing insurance coverage does not protect them if they have an accident while driving to pick up passengers or returning home after dropping passengers off.

Doesn’t the Rideshare Company Provide Protection?

Some believe these activities are covered through the insurance programs offered by the ridesharing services.

That isn’t true either.

While the services do provide insurance protection while passengers are in the vehicle, they provide very little, if any, coverage while you are in your vehicle waiting for a passenger.

Even then, the protection is limited to injuries and the property of others and does not protect your car. This leaves a huge gap that could be extremely costly.

Rideshare Periods

Period 1 – you are logged into the rideshare app and are waiting for a passenger request.

Period 2 – you are in route to pick up your passenger.

Period 3 – you are taking your passenger to their destination.

During the second or third rideshare periods, the rideshare company provides liability protection, underinsured/uninsured motorist protection, and contingent coverage for collision and comprehensive – generally with low coverage limits.

Anyone who has ever been in a major accident understands the importance of proper coverage limits.  The standard policies from rideshare companies could leave you on the hook for anything that goes beyond the limits of the rideshare organization’s policy.

What Kind of Coverage is Available for Rideshare Drivers?

Uber and Lyft are the primary rideshare companies currently.  Far too many drivers are not-so-pleasantly-surprised to learn only after accidents that their existing insurance coverage offers no protection for their rideshare activities or service.

If you’re considering operating a rideshare business, you should have a rider policy for your protection before, during, and after the time you have passengers in your vehicle.

While few insurance companies offer direct insurance for rideshare drivers, those that do offer it in the form of policy riders.  There are policies in addition to your standard coverage that seek to fill in gaps between your existing auto insurance and the protection offered by the rideshare company.

There two different types of riders for rideshare drivers:

  1. Basic rideshare driver endorsement.
  2. Enhanced rideshare driver endorsement.

Basic rideshare endorsement extends the protection you receive from the rideshare organization.

Enhanced cover includes basic coverage while offering additional coverage for the second and third periods.

The policy from Plymouth Rock goes further, though, by covering the difference in the physical damage deductible from your personal auto policy and the policy offered by your rideshare company during the second and third periods.

This coverage can be massively beneficial to people suffering from a sudden loss of income, while their car is being repaired, and a higher than expected deductible associated with getting the repairs from the rideshare insurance alone.

Do You Really Need Rideshare Endorsements?

The answer to that question is yes!

In fact, you really can’t afford to go without it.

The good news for most drivers is that it isn’t expensive to add to your existing insurance policy.

The not-so-great news is that few insurance providers offer this type of protection at the moment.

But, as more and more people dive into the world of rideshare driving, it is becoming an area of greater demand among consumers.

Working with an independent insurance agency for your auto insurance needs offers you the greatest flexibility in finding coverage suitable for your rideshare business needs.

Ideally, you want protection that allows you to get your car back on the road as quickly as possible after accidents occur, and for as little out-of-pocket as possible as well.

That is why rideshare insurance is so crucial for all rideshare drivers in today’s marketplace.

Learn More About Rideshare Driver Insurance

If you’re looking to obtain rideshare driver insurance, contact us here at Otterstedt Insurance Agency at 201-227-1800.

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