Occasional rideshare driving? Here's what to know about insurance
By Allstate
Last updated: January 0001
If you occasionally drive for a rideshare or delivery platform like Uber, Lyft, DoorDash, or Instacart, it’s important to understand how that affects your car insurance. Even if you only drive a few hours a week, using your vehicle for commercial purposes changes your risk profile, and not all personal auto policies provide coverage when your app is on.
Why rideshare and delivery work changes your coverage
Personal auto insurance is designed for private, non-commercial use. When you use your car to earn income, your insurer may consider it a form of commercial activity, which is typically excluded from a standard policy unless disclosed.
If you haven’t informed your insurer that your car is being used for ridesharing, your claim could be refused, explains the Insurance Information Institute (III)
Understanding the three coverage periods
When it comes to rideshare or delivery apps, coverage is typically broken into three periods:
- Period 1: App is on, but no ride/delivery has been accepted
- Period 2: En route to pick up the passenger or order
- Period 3: Passenger or order is in the vehicle
Most personal policies exclude coverage during all three periods. Rideshare platforms often provide limited liability coverage, particularly in Periods 2 and 3. However, gaps in coverage can occur, especially during Period 1.
What is a rideshare endorsement?
A rideshare endorsement is an optional add-on to a personal policy that provides extended coverage while you're engaged in rideshare activity. It can help:
- Cover you during Period 1
- Prevent coverage gaps
- Avoid the need for a full commercial auto policy (which is more expensive)
Many insurers are offering this type of optional coverage for rideshare drivers.
What if you only drive occasionally?
Even part-time or occasional rideshare and delivery driving must be disclosed to your insurer. As III points out, coverage exclusions can apply regardless of how infrequently you drive for a platform.
Best practices for occasional rideshare drivers
- Let your insurer know that you drive for Uber, Lyft, or another rideshare service.
- Ask about rideshare endorsements
- Review your platform’s policy and deductibles
- Understand liability limits and what’s covered when
- Avoid gaps, especially during Period 1
Driving for a platform, even just part-time, can leave you underinsured if you’re not careful. Make sure your policy includes the protection you need, so you’re covered every time you hit “go.”