When looking forride-sharing insurance in California, you should know how much coverage you need and when you need it.
What Type of Insurance Do You Need If You’re a Ride-Sharing Driver?
When you’re working as an Uber or Lyft driver, you should know that standard car insurance might not help when you’re working for a ride-sharing service. When working as this type of driver in California, you need auto insurance whenever your ride-sharing app is on. Luckily, some companies provide their own insurance so you will meet the state’s car insurance requirement without buying your own ride-sharing insurance policy.
Keep in mind that if you don’t purchase your own ride-sharing insurance, though, you won’t get the benefits that come with it. Some examples include the following:
- Collision and comprehensive coverage
- Lower deductible
- Higher liability limits
The best way to be fully covered is to purchase ride-sharing insurance. These hybrid policies provide coverage for personal vehicle usage and when you’re signed into the app but not covered by the ride-sharing company’s insurance.
You can use this type of insurance whenever you’re driving a vehicle to earn money, whether it’s for a ride-sharing service or an app-based delivery service.
It’s considered a commercial insurance policy, and these plans usually have higher liability limits compared to typical policies. According to Trusted Choice, the average cost for a commercial policy ranges between $1200 to $2400 annually.
Certain companies offer ride-sharing coverage in limited markets. According to WalletHub, MetLife is only offered to Lyft drivers, while USAA has ride-sharing policies in California for military members and their families. GEICO is another company that offers a combination of personal and ride-sharing policy, but it has a mileage cap.
What Does Ride-Sharing Insurance Cover?
The ride-sharing insurance options vary depending on the period, which is the type of stage you have during your time as a driver. The minimum coverage requirement also varies depending on the period.
- Period 0: This occurs when your ride-sharing app is off, making your personal insurance active. Your personal insurance must meet California’s minimum coverage, which consists of $15,000 bodily injury coverage per person $30,000 bodily injury coverage for each accident, and $5000 property damage for each accident.
- Period 1: This starts when you turn on your app until the time you receive a passenger. Both Lyft and Uber cover the insurance limits in California if you cause an accident. Included in this coverage is $50,000 for each person per accident, $100,000 total injury for each accident, and $30,000 property damage liability. Also, according to the California Public Utilities Commission, ride-sharing companies must provide excess coverage during this period with a $200,000 minimum liability for each incident. During this period, if you get into an accident, the injured person can sue you and your insurer.
- Period 2: This period begins after you accept a passenger and are on your way to get them. However, there’s a gray area when you’ve accepted a request but haven’t picked up a passenger. If this happens to you, try to screenshot the time to prove that you were on the way since the passenger might cancel the request. The insurer might challenge you to say you weren’t on your way, so the photo evidence is proof.
- Period 3: This starts when your ride ends in the app or the passenger leaves the vehicle.
During periods 2 and 3, the ride-sharing companies offer a $1 million commercial insurance policy. This is the first to use when filing a loss or claim. However, both Lyft and Uber can ask that you send your claim first through your personal insurance. That doesn’t mean your insurance will pay because when the app is on, these ride-sharing companies are your primary policies.
If you’re not the at-fault driver and the other driver’s coverage is enough, you can rely solely on ride-sharing insurance. For additional coverage, your personal policy and the ride-sharing policy might apply. Also, your ride-sharing insurance covers damages if your insurance is insufficient.
Also, during periods 2 and 3, Lyft and Uber offer contingent collision insurance, which protects your vehicle in case of an accident, and comprehensive coverage, which protects your vehicle if it’s involved in a non-collision incident such as theft or vandalism.
Are You Liable If the Accident Wasn’t Your Fault?
If the at-fault driver doesn’t have insurance, you don’t have to worry about the deductible for bodily injury. However, you will have one for comprehensive and collision coverage, so you will have to pay it to fix your vehicle. However, if the responsible driver has insurance, their insurer will pay based on their policy’s limits. If it’s not enough, your ride-sharing insurance will pay for overage minus the deductible.
What Should You Do If You’re in an Accident?
When you’re a ride-sharing driver, make sure you follow these steps if you are involved in an accident:
- Check on everyone. Try to pull over to the side of the road and call 911. If you can’t pull over, stay in your vehicle unless doing so will cause more danger. If you were on your way to pick up a passenger but hadn’t done so yet, take a screenshot with your phone to prove you were in period 2.
- Get everyone’s contact information. Gather the names, license plate numbers, and insurance information of everyone involved. If there are witnesses, get their information as well.
- File a police report. Make sure to do this before you leave the scene.
- Seek medical attention. Even if you don’t show any outward injuries, you might have soft tissue injuries that won’t show up until your adrenaline wears off. Sprains, whiplash, and muscle spasms might not be apparent, so having a medical professional check you out is important.
When shopping for ride-sharing insurance, it’s important to remember that it can either be a hybrid policy or an add-on to your personal policy. You cannot purchase stand-alone coverage from one company and have a personal policy from another. Make sure you shop around to get the best prices for the type of coverage you need.
Check this out if you need additional information, resources, or guidance on car insurance.
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