Understanding Ride Share Insurance for Uber and Lyft Drivers

Note: This is a Q&A I created for an insurance agent who provides special insurance policies for Uber & Lyft drivers. This was one of a series of several articles on very specific types of insurance the agent offered. It also ran with a campaign of accompanying videos.

Uber and Lyft are “ride sharing” services like a cab service, they’ve been around for a few years but it’s still a relatively new industry. With the old fashioned taxi cab service, you had to have an actual cab drivers license and special taxi cab insurance and it was really more of a full time business. With Uber and Lyft, however, people really look at it like “Hey, I can do this for 10 hours a week” or “I can drive for ten hours a month when I have extra time,” and they use their personal car. Pretty cool, right? So it’s not as involved as a cab. While some Uber and Lyft drivers do work full time and that’s really all they do, that’s not the case for most of them. Most of them look at it like a part time thing they can start or stop at any time.

I have several clients that drive for either Uber or Lyft, and I even have family members who do: my daughter has been a ride share driver from time to time, and my Uncle drives about 20 hours a week. It’s a great way to make some extra cash, but you’ll want to make sure you’re properly insured while you do it.

How can Uber and Lyft drivers get car insurance?

This can be tricky, actually. There are only a few big companies that really offer this special ride sharing kind of insurance. The kind of insurance my agency offers is a special rider—an add-on—it changes the contract on your existing auto insurance policy to cover people in your car. So it covers “drivers for hire” with your personal policy, instead of having to get a whole separate policy. So you just start with a normal auto policy, and then you add the “rider” to it (no pun intended!).

Does Ride Share insurance cover a specific car, or the driver?

This is very important: the insurance covers each specific car, not the driver. For example, I have a client that drives with Uber, and he has two different cars: a small Toyota, and a larger (and much more expensive) Lexus. He usually drives the Toyota as the workhorse for Uber, and he uses the Lexus for himself. So he called me the other day and told me he was going to start using his Lexus to offer “UberBLACK,” which is a more expensive and luxurious service that the driver can charge more for. So I had to add his Lexus to the policy as well. It’s not hard or complicated to do, but you need to make sure each individual car is covered.

How much does Ride Share insurance cost, and how is it calculated?

Some people get nervous and think they’re going to be charged by the number of miles they drive or the number of rides they make, but that’s not the case. The pricing is a “flat endorsement” based on who you are and what kind of car you have. The cost is really not affected by the number of miles you drive. Generally, you can expect ride share coverage to add about 25% to your existing car policy. Sometimes that can go up to around 30%, but the total cost is affected by things like your age, your driving record, etc.

For example: I have one client that is over 60 years old who drives for Uber and his premiums are very inexpensive. But I also have two other clients that are young: in their 20s, and when they added ride share coverage, their monthly premiums doubled. So again, it’s highly dependent on who you are, where you live, your age, and your driving record.

What if I get in a crash while driving for Uber or Lyft?

Just like if you get into a car crash with your normal policy, everyone will be covered. But if you’re driving for Uber or Lyft, you need that extra ride share coverage to cover the people in the back of your car because they’re technically “clients” and not just friends or family. This is just like any other business insurance—if you’re operating a business, you need a business policy to protect your customers or clients. So if you have ride share insurance, it extends the coverage to everyone in the car. As far as pricing goes, if you get in a crash, the policies I offer generally won’t raise your rates if you’ve been claim-free for the previous five years.

Do I need a separate policy for Uber and Lyft? Or are they all covered on the same policy?

Good news: you can drive for just about every ride sharing company out there: Uber, Lyft, or anyone else, with just one policy. Each of these ride sharing companies has their own requirements for the minimum coverage you need, but our insurance policies far exceed those minimums. Most ride sharing companies won’t allow you have just the bare legal minimums for your coverage anyway: you have to have a substantial amount to make sure you don’t come up short in the event that there’s an accident. Our policies go above and beyond, and are accepted by all ride sharing companies.

If you’d like to drive for Uber or Lyft and need insurance, or if you’re already a ride share driver and need a better policy, I would love to talk to you about your insurance needs. Contact me today, and let’s get you a quote for your coverage!

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