How does Uber insurance work? (2022)

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There are millions of Uber drivers across the U.S. who use the service to generate full-time or part-time income. Drivers are essentially operating their own small business. So, that means they need insurance to protect their business and reduce their financial liability.

Uber offers its own "Driver-Partner Insurance." However, this insurance comes with several coverage gaps. Here's what you need to know about Uber insurance.

KEY TAKEAWAYS

  • In many cases, rideshare drivers are required to have commercial insurance or a personal policy that offers ridesharing coverage.
  • Uber offers its own rideshare insurance coverage, but drivers should still have their own personal insurance policy to make sure they are fully protected.
  • Uber's insurance policy will not provide coverage while the app is not running. However, during these times, your personal auto policy should still provide coverage.
  • Uber offers $1 million in third-party liability coverage to protect riders against covered accidents on the way to pick up passengers or while transporting them.

IN THIS ARTICLE

  • What is rideshare insurance?
  • How does Uber insurance work?
  • What Uber insurance covers
  • Ridesharing and insurance
  • Insurance types for rideshare drivers
  • How much does Uber rideshare insurance cost?
  • How to compare Uber and rideshare car insurance quotes
  • Frequently Asked Questions

Rideshare insurance provides coverage for you and your vehicle when driving for a ridesharing service such as Uber. It kicks in as soon as you turn on the app.

But note, your personal auto insurance provider may drop your policy if they discover you've been driving without separate rideshare coverage. So if you want to become a rideshare driver, you'll need to either have a commercial auto insurance policy or a personal auto insurance policy that offers rideshare coverage as an endorsement.

How does Uber insurance work?

Most rideshare companies -- including Uber -- will provide specific rideshare insurance to drivers up to the state limits. If that's the case, you aren't required to purchase a separate rideshare insurance policy. However, Uber's insurance policy doesn't cover you when the app is closed. During these times, your personal auto policy provides coverage.

(Video) Uber Insurance Explained: Why You NEED Extra Auto Insurance 🚨🚨🚨

When the app is open, Uber's insurance provides liability coverage at certain points during your trip. Your own personal rideshare-friendly policy will provide coverage during other phases of the trip, depending on what's outlined in the policy.

This is all dictated by the three main coverage periods insurers use to separate a rideshare trip:

Period 1: The Uber app is on, but you're waiting for a ride request.

Period 2: You've accepted a ride request and are on your way to pick up a passenger.

Period 3: The passenger is in your car. This period ends when the passenger exits the car.

If you get into an accident while working for Uber, you need to know whether your personal policy or Uber's policy will provide coverage during each specific period, so that your claim isn't delayed or denied.

What Uber insurance covers

Uber's Driver-Partner Insurance provides different levels of coverage across Periods 1, 2 and 3. Coverage varies significantly depending on whether a passenger is in your car. Here's a breakdown:

Insurance coverage during Period 1

Uber's liability limits are relatively low during Period 1. The company doesn't offer comprehensive and collision coverage during this phase of the trip.

  • Liability: Uber offers third-party liability coverage(assuming your personal insurance doesn't apply) of $50,000 in bodily injury per person, up to $100,000 in bodily injury per accident and $25,000 in property damage per accident.

Insurance coverage during Periods 2 and 3

Your liability is well-covered, but collision and comprehensive coverage come with certain caveats.

  • Liability: If you get into a covered accident on your way to pick up passengers or while transporting them, Uber offers $1 million in third-party liability coverage.
  • Uninsured/underinsured motorist: Uber provides uninsured/underinsured motorist bodily injury coverage for you and your passengers if you get into a covered accident and the other driver is at fault and is uninsured or underinsured.
  • Collision and comprehensive:Uberoffers comprehensive and collision insurancethat will cover up to your car's actual cash value. However, this coverage is contingent and comes with a $2,500 deductible, which means you'll have to pay $2,500 out-of-pocket before Uber's coverage kicks in to cover your claim.

Uber's coverage levels, especially for liability, leave coverage gaps that increase your out-of-pocket costs. That's especially true if your car is damaged or totaled or if you and other passengers are injured and have medical expenses.

For liability coverage, most insurance experts recommend $100,000 of bodily injury coverage per person, $300,000 of bodily injury coverage per accident and $100,000 of property damage coverage. Uber insurance coverage is significantly below these thresholds.

Expert Advice

(Video) Uber Insurance: How Does It Work

How does Uber insurance work? (1)

Anthony Martin

Founder and CEO of Choice Mutual, an insurance agency in Reno, Nevada

Uber's deductible is also significant. "Even with adequate insurance coverage, you can be out thousands in the case of an accident that causes property or bodily damage," says Anthony Martin. "For many Uber drivers, $2,500 is a risk too big to take."
Another important point to keep in mind is that Uber only covers comprehensive and collision insurance coverage if you maintain them on your personal auto insurance. "Even if you were exclusively driving your vehicle for Uber, if you skip these two essential insurance protections, Uber won't cover you," he says.

Ridesharing and insurance

Regardless of what insurance Uber offers, every driver should have some form of personal insurance coverage, whether it's a liability or comprehensive policy.

However, if you're a rideshare driver, you should know that your personal auto policy only covers your vehicle's personal use. If you're driving your car for business, you'll need a commercial policy.

"Traditional car insurance is not set up for the liability and medical payments exposure, and the liability a driver exposes himself or herself to while getting paid to transport individuals," says Ben Galbreath, an agent with Wallace & Turner, an independent insurance agency in Springfield, Ohio.

Personal car insurance policies all have a clause that excludes explicitly commercial activities like ridesharing. Legally, your insurer can deny any claim if you drive for Uber and get into an accident.

There are three main types of insurance every driver should consider. Rideshare drivers, in particular, should maintain comprehensive and collision coverage.

  • Liability: Liability insurance is mandatory in every state. It covers injuries to another person or damage to their property due to an accident in which you're at fault. Liability insurance will never cover your own car or your own injuries. Some states have low limits that may not be enough to cover damage or injuries to other drivers if you get into an accident. This means you'll have to pay out-of-pocket to fill the gap, so you may want to purchase additional liability coverage.
  • Collision/comprehensive: These coverages are not mandatory in every state. However, if you have an auto loan on your car, your lender typically requires this coverage. Collision coverage will pay to repair or replace your vehicle if it is damaged in an accident. A comprehensive policy covers car damage that isn't related to an accident, such as hail or fire damage or vandalism. Resist the temptation to skip this coverage unless you're prepared to write a check for another vehicle.
  • Uninsured/underinsured motorist: Some states require this coverage. If you're involved in an accident and the other driver is at fault but doesn't have car insurance, uninsured motorist insurance covers your injury-related medical expenses and those of your passengers. It also can cover your lost wages, pain and suffering. If the driver who hit you has insurance with low coverage limits, underinsured coverage will cover the difference. For this type of coverage, you should choose coverage amounts that match your own liability limits.

Rideshare drivers should also have rideshare insurance. That coverage can come through an endorsement added to their personal auto policy or via a separate commercial policy.

"Rideshare insurance is the best option for drivers since it covers them during the period 1 gap (app on, no passenger yet) and the companies won't drop drivers from the policy like they would if you had a personal policy and signed up for Uber/Lyft," says Harry Campbell, owner and founder ofThe Ride Share Guy blog and podcast.

How does Uber insurance work? (2)TIPGalbreath says rideshare drivers should consider their personal assets, such as home, car, bank accounts and investments when thinking about coverage.

(Video) Uber Accident Claims, Settlements, Insurance and Secrets

"Auto claims have high bodily injury payouts, so medical bills and liability payment could bankrupt individuals if the right type of coverage isn't purchased," he adds.

Galbreath says if you're looking for coverage, you should take the time to compare policies and that you shouldn't base your decision on price alone.

"My advice would be to look into coverage options and pay for what you need to be protected based on your personal liability," he says. "The cost of insurance would not come close to the potential loss a driver could risk personally or professionally."

The insurance coverage that Uber provides to its drivers is free. If you buy a separate rideshare insurance policy, the cost will depend on a number of factors. In general, though, most people can get it for less than $30 per month.

If you decide to buy a separate rideshare insurance policy, it's a good idea to get several quotes before making a decision. Most major insurers will allow you to get a quote online after providing a few personal details. There are also online insurance marketplaces that will pull quotes from several companies at once based on your information. If you prefer, you can call each company individually to inquire about coverage options and costs.

Frequently Asked Questions

Does my regular auto insurance policy cover ridesharing?

No. Personal auto insurance policies do not cover commercial activities (i.e. driving to make money). You could be dropped from your personal policy if the insurance company discovers you're using that car to drive for a rideshare company without adequate additional coverage.

Will driving for Uber affect my car insurance?

If you drive for a ridesharing company, your personal insurance policy premiums will likely increase. This is because you'll be spending more time on the road, which increases your risk of an accident.

Is rideshare insurance expensive?

Though purchasing separate rideshare insurance means adding to the overall cost of your premiums, these policies are fairly low-cost. Most people pay less than $30 per month.

(Video) Do Uber & Lyft Drivers Need Rideshare Insurance?

Do you need rideshare insurance?

Yes, you need to have insurance coverage while driving for a rideshare company, because your personal policy will not cover driving for commercial purposes.

Do Uber and Lyft provide insurance?

Both Uber and Lyft provide their drivers with insurance coverage. However, the coverage is minimal and only enough to satisfy state requirements. You might need to supplement these policies to ensure you have enough coverage. Without enough coverage, you’ll be on the hook for out-of-pocket costs if you get in an accident.

What insurance do you need during the gap?

Uber insurance will kick in once you're actively using the app (waiting for a ride, driving to a pickup or already have a rider in your car). When the app is closed, you need to have third-party rideshare insurance to protect you and your car.

What if my state does not have rideshare car insurance?

Though insurance laws vary by state, you should be able to acquire rideshare insurance in some form. At the very least, Uber provides insurance to all of its drivers in all states, so you are protected when picking up passengers and driving them to their destinations. Inquire with your personal auto insurance company to learn what supplemental rideshare insurance options are available in your area.

Does Uber insurance cover rental cars?

No. Uber only provides liability insurance, and in some cases, comprehensive coverage. It does not reimburse drivers for a rental car if they are in an accident and need alternative transportation. In this case, you would need to check with your personal policy or separate rideshare policy.

(Video) Uber - Insurance FACTS You NEED to Know before You Drive!!

-- Satta Sarmah-Hightower contributed to this report.

FAQs

What insurance do you need to be a Uber driver? ›

As an Uber driver, you'll need commercial private hire insurance, public liability cover, and Social, Domestic & Pleasure cover too. This will protect you while driving for work and in your spare time.

How long does Uber take to approve insurance? ›

Uploaded documents generally take 1-5 days to review. To streamline the application process, please keep these tips in mind when uploading documents: Make sure all the documents are up to date and not expired.

How do I claim for uber sick? ›

You can file a claim using a simple online claims form located in the help section of the Uber Driver app. After you submit your claim, you'll receive an confirmation email with your claim number, claim adjuster's contact information and a list of additional documents you may need in order to process your claim.

How much is insurance for Uber car? ›

Uber driver insurance | Quotes from £6.56 per month | Simply Business UK.

Can I use third party insurance for Uber driver? ›

What type of car insurance do I need as an Uber driver? To be an Uber driver, you will need private hire vehicle insurance with cover for hire and reward.

Videos

1. Uber Insurance Coverage | Got in a Accident
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2. Uber Accident Insurance: What Every Uber Driver Should Know
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3. How Delivery Insurance Works For Uber Eats & DoorDash Drivers
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4. Do Uber/Lyft Drivers Need Rideshare Insurance?
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5. Uber driver involved crash warns drivers of insurance loophole
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6. Driving For Uber Could Invalidate Your Personal Auto Insurance Policy
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