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What Does Rideshare Insurance Cover?

Updated: July 2019

If you drive for a ridesharing company, such as Uber or Lyft, you might already be aware that a personal car insurance policy typically does not cover "business use" of your vehicle. In other words, if you're in a car accident while you're on the clock, you could end up paying out of pocket for expenses such as vehicle repairs or an injured person's medical bills.

So, if you use your vehicle for both personal and business purposes, you might want to consider additional coverage to help protect it. Here are some things to consider about ridesharing insurance — sometimes referred to as ride-hailing insurance — and the types of scenarios it may help cover.


Video Transcript

If you're driving for a ride-sharing company, you probably want to know, Am I covered by my personal car insurance policy?

The short answer? Probably not.

Most personal auto policies exclude coverage if your passengers are injured or your vehicle is damaged while you're driving for a ride-sharing company.

Ride-sharing companies offer insurance coverage for business use of your vehicle, but policies vary by company and there are limitations.

You may find that coverage types and coverage limits vary depending on how you're using your vehicle.

You may also be on the hook for paying a high deductible when it comes to repairing damage to your car. That's why it may be a good idea to add ride-sharing coverage to your personal policy.

This type of insurance may help fill in coverage gaps between business use and personal use of your vehicle, as well as help protect you from paying high out-of-pocket costs.

Other questions? Talk to your agent to learn more.

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RIDESHARING INSURANCE OPTIONS

Some insurers offer a ride-hailing insurance endorsement you can add to your existing personal car insurance policy. If you drive for a ridesharing company (sometimes called a transportation network company, or TNC), the extra coverage offered by this endorsement may help fill gaps between the TNC's commercial policy and your personal auto insurance policy.

Another option may be a full ridesharing insurance policy, which combines both personal and business coverage into one auto policy.

Insurance premiums, coverage types and policy limits may differ among insurers, and the available coverage will also vary by state.

RIDE-HAILING COVERAGE GAP: BUSINESS USE VS. PERSONAL USE

According to the National Association of Insurance Commissioners (NAIC), the major TNCs provide limited commercial insurance for their drivers who are using their personal cars for the TNC's business. Business use may include times when the driver is en route to pick up a passenger or has a passenger in the vehicle.

But, since personal car insurance generally excludes all business use, the driver may not be covered by either policy when he is available for hire but has not yet accepted a ride request, the NAIC says. A ridesharing endorsement may help fill that coverage gap. It extends certain coverages on your personal policy so that they apply during the "app on" period when you're waiting for a ride request.

So, if an accident occurs while you're waiting to be hired, the ridesharing endorsement may help prevent you from paying out of pocket for related expenses. Keep in mind, however, that if you don't have collision coverage on your personal policy, you will not have it under the endorsement, either. In that case, you would still have to pay for the full cost of repairs to your own vehicle if you have an accident while you're waiting for a ride request to come in. Similarly, if you don't have comprehensive coverage on your personal policy, you also will not have it under the ridesharing endorsement.

TNC COVERAGE: DEDUCTIBLE GAP

A ridesharing endorsement may also help reduce your out-of-pocket expenses when it comes to paying a TNC policy's high deductible. Though some TNCs provide commercial insurance for drivers, if you get into an accident while driving for the company, you'll likely have to pay the TNC policy's deductible.

A deductible is what you pay out of pocket toward a covered claim. Collision coverage and comprehensive coverage each have separate deductibles. On a personal auto insurance policy, you may be able to select your collision and comprehensive deductibles — for example, $500 each.

On the other hand, when you drive for a TNC under the protection of its commercial insurance policy, you may have to pay higher deductibles for collision and comprehensive coverage — for example, $1,000 or $2,500. If you're involved in a covered collision while you're on your way to pick up a passenger or have a passenger in the vehicle, you'd have to pay the TNC's deductible out of pocket before commercial insurance benefits kick in to help repair your car.

A ridesharing insurance endorsement may help cover the gap between your personal auto policy's deductible and the TNC policy's deductible in this type of scenario. So, if your collision coverage deductible is $500, and the TNC's collision coverage deductible is $1,000, the ridesharing endorsement may help pay the $500 difference.

If you're thinking of becoming a rideshare driver for a service like Uber or Lyft, the Insurance Information Institute suggests that you discuss with your TNC its coverage types, limits and deductibles.

Once you know what coverage may be available through your ride-hailing company, you can talk to your agent about filling in any potential coverage gaps with a ridesharing endorsement on your personal auto insurance policy.

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This content is for informational purposes only and may not be applicable to all situations.

Coverage subject to terms, conditions, and availability. Policy issuance is subject to qualifications. Allstate Insurance Company, Allstate Indemnity Company, Allstate Fire and Casualty Insurance Company, Allstate Property and Casualty Insurance Company, Northbrook, IL. © 2019 Allstate Insurance Company, Northbrook, IL.

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