Since driving for a ridesharing company involves three different types of auto insurance – your personal policy, a ridesharing endorsement to your personal policy, and your TNC’s coverage – it can be tricky to understand how they all interact.

Basically, it boils down to three phases of coverage, according to the NAIC.

Phase one: Awaiting a ride request

As soon as you sign into an app like Uber or Lyft, your personal auto insurance policy will likely consider you “on the clock”, meaning you’re officially entering business use.

This is when you’re most likely to have an insurance gap, because your TNC’s policy may only offer limited coverage until you accept a ride. Uber, for instance, offers minimal liability coverage with a limit of $25,000 in property damage and $100,000 for injuries if you’re at fault for an accident. The TNC’s policy won’t cover your injuries or damage to your vehicle unless it’s required by your state.

By adding a ridesharing endorsement to your personal policy, the comprehensive and collision coverages from your personal policy (if you have them) could kick in to help repair damages to your own vehicle.

Phase two: Picking up a passenger

Once you accept a ride and you’re headed to pick up a passenger, your TNC’s coverage kicks in. Their policy will typically provide $1,000,000 in coverage for other drivers’ vehicle damage and injuries. You may have to pay a deductible as high as $2,500 before their insurance will repair your vehicle, and it may not cover your own medical bills if you’re injured.

If you’ve added ridesharing coverage to your personal policy, it can help you pay that high deductible, and it may fill in the gaps in your TNC’s policy.

Phase three: En route with passenger

When you’ve picked up your passenger and you’re headed to their destination, the same TNC policy will apply as during period two, but with a passenger and their belongings in your vehicle, it’s even more important that you’re financially protected, should you be deemed responsible for causing an accident. Consult with your personal insurer to find out whether a ridesharing endorsement can help provide you additional peace of mind.

Personal use

You’ve dropped off your last passenger of the day, you’ve signed out of your ridesharing app, and you’re headed home. At this point, your personal auto insurance policy is back in effect.