Rideshare Insurance: Coverage, Costs, & Best Options for Drivers

As a rideshare driver, you should know that the insurance coverage provided by the rideshare company—Lyft, Uber, or even delivery-based companies like Instacart—is not comprehensive. Although these companies do provide some coverage, you’ll want to consider investing in rideshare insurance to cover the gaps between the company’s coverage and your personal auto insurance.

In this guide, we’ll break down everything you need to know about this type of small business insurance, including how it works, how much it costs, and the best rideshare insurance providers on the market.

What Is Rideshare Insurance?

Rideshare insurance provides liability and damage coverage for rideshare drivers (e.g., Lyft or Uber). Coverage is also available to delivery drivers, like those who drive for Instacart, Grubhub, or Seamless.

According to the Federal Trade Commission, commercial auto insurance typically does not cover business-related damages.^[1] Therefore, rideshare insurance bridges the coverage gap between your personal auto policy and the insurance policy provided by the rideshare or delivery company.

Why Do I Need Rideshare Insurance?

When it comes down to it, three different insurance policies work together when you drive for Uber, Lyft, or another ride-hailing company—your personal auto policy, your rideshare insurance, and the insurance that the rideshare company provides.

Rideshare insurance is necessary because your personal auto insurance policy and the insurance provided by the rideshare company do not cover you for the entire time you’re on the job. It’s unlikely that your personal auto insurance policy will cover accidents that occur when you’re driving for rideshare and the policy you receive from Uber and Lyft is limited in its coverage.

How Rideshare Insurance Coverage Works

Your rideshare insurance coverage depends on which ridesharing period the incident occurs. Uber and Lyft break down the ridesharing process into four periods:

• Period 0: You’re driving, and your app is off. Your personal auto insurance covers you during this time.
• Period 1: Your app is on, and you’re waiting for a ride request. The rideshare company’s insurance will only provide liability coverage. For damage coverage, you need rideshare insurance.
• Period 2: You’ve accepted a ride request and are in transit to pick up the customer. The rideshare company’s insurance will provide coverage.
• Period 3: You’re transporting the customer. The rideshare company’s insurance will provide coverage.

As you can see, Period 1 only offers limited liability coverage, but you gain comprehensive coverage during Periods 2 and 3—when you’re picking up or transporting riders.

Next, let’s look at a breakdown of Uber’s and Lyft’s insurance coverage for each period:

Uber and Lyft Insurance Coverage Breakdown^[2][3]

What Does Rideshare Insurance Cover?

As we’ve explained, rideshare insurance is intended to provide gap coverage—especially during Period 1, when your personal auto policy does not cover you, and your coverage from the rideshare company is limited.

This being said, the specifics that are covered by rideshare insurance will vary based on your state, provider, and the type of policy you choose. Generally, however, rideshare insurance can cover:

• Damage to your car from a collision
• Loss or damages to your car if it’s stolen, vandalized, or damaged in a fire or natural disaster
• Injury caused by a driver who is uninsured or underinsured

These types of coverage, referred to as collision coverage, comprehensive coverage, and uninsured/underinsured motorist coverage, respectively, protect you during Period 1, where your other policies do not cover you.

Some rideshare insurance policies also offer more coverage options, and sometimes even add onto or replace your personal auto policy. This extra coverage might include:

• Medical payments for you and your passengers
• Property damage and bodily injury to others
• Legal defense if someone sues you over an accident
• Rental car reimbursement
• Roadside assistance and towing expenses

How Much Is Rideshare Insurance?

Annual Cost

Generally, the cost of rideshare insurance ranges from about $15 to $120 per year. The cost varies by the provider, policy, and the state where you’re driving. Also, rideshare insurance is often an add-on to your existing auto insurance plan, making it reasonably affordable.

John Frigo, a digital marketing lead at MySupplementStore and former rideshare driver, pays an additional $15 to $17 monthly to add rideshare coverage to his State Farm personal auto insurance plan.

Deductible

The deductible, the specific amount you must pay before the insurance company pays out benefits, for common incidents range from $250 to $2,000. 

Overall, the lower your deductible, the higher your annual premium. To save on insurance, therefore, you might opt for a high deductible—but this also means you’ll have to pay more out of pocket before your insurance company covers your costs.

Where to Get Rideshare Insurance

Big-name auto insurance companies, like Geico, State Farm, and Progressive now offer rideshare insurance, but with some limitations. Some insurance companies provide only hybrid policies—rideshare insurance is available only as an add-on to your existing personal auto policy. Also, some rideshare insurance policies have limited state coverage.

Additionally, rideshare insurance requirements can vary by state and city. For example, New York requires that you purchase commercial auto insurance (which is different than simple rideshare insurance) and apply for a commercial driver’s license.^[4]

Keep in mind that you may need to commit to a single insurance carrier. You cannot, for example, have a personal auto insurance policy from Geico and then a rideshare insurance policy from State Farm.

Best Rideshare Insurance Providers

Wondering where to start your search for rideshare insurance?

As we mentioned, many major insurance companies offer rideshare insurance. Therefore, you might start by reaching out to your current personal auto insurer to see if they can work with you for rideshare insurance as well.

On the other hand, if you’re looking to change your provider or your current provider doesn’t offer this type of insurance, you might consider the five top companies below:

Top Rideshare Insurance Providers, Summarized

1. State Farm

With 46 out of 50 states covered, State Farm is an excellent option for rideshare insurance for drivers all over the country.^[5] State Farm offers rideshare insurance as an add-on to their personal auto policies, providing coverage that includes:

• Medical, emergency roadside assistance, and rental car reimbursement
• Personal deductible applies to rideshare as well; if your personal policy is lower than the deductible on your insurance from the rideshare company, you pay the lower amount
• Claims are filed and managed through State Farm

Also, State Farm is affordable—you’ll only pay 15% to 20% more on your current annual premium. For example, if you spend $300 every six months for your personal auto insurance, State Farm’s rideshare coverage would add about $45 to $60 to your costs.

This being said, however, unlike some other insurers, you’ll have to work directly with a local State Farm agent to receive a quote and discuss your coverage options.

2. Geico

Geico is the only insurance company that offers an all-in-one personal auto and rideshare insurance policy. Instead of an add-on to your personal policy, Geico offers a hybrid policy that ensures you receive the same coverage regardless of whether or not you’re driving rideshare at the moment or not.

Geico’s coverage can include:

• Collision damage
• Medical expenses for you and your passengers
• Property damage and bodily injury to others
• Legal defense in case of a lawsuit
• Physical damage
• Uninsured or underinsured motorist coverage
• Reimbursement for towing and roadside assistance expenses
• Rental reimbursement
• Coverage can extend to delivery drivers, as well

You can put in your information online to receive a free quote for Geico’s hybrid rideshare insurance. Our sample quote yielded a $269 monthly cost, which covers personal and rideshare driving.

3. Mercury

Like many other providers, Mercury Insurance offers rideshare insurance as an add-on to their general personal auto policies. This being said, although Mercury is only available only in nine states.^[6]

Starting for as little as s little as $0.90 per day, Mercury’s rideshare insurance covers:

• Gaps in liability insurance coverage between standard auto policy and policy from the rideshare company
• Medical payments in the event of an accident
• Damage to other vehicles in the event of an accident
• Repair of your car in the event of an accident

When added to their general auto coverage, therefore, Mercury offers protection at all stages of the rideshare process.

If Mercury provides coverage in your state, you can fill in your information online to quickly and easily receive a free quote.

4. Allstate

Next, Allstate’s “Ride for Hire” coverage can provide you with rideshare insurance for “for as little as pennies a day”—you can potentially pay less than $30 monthly.^[7] With Allstate’s add-on endorsement, you’ll receive coverage during Periods 2 and 3 of the rideshare process—both covering gaps in your policy from the rideshare company and offering extra coverage.

This being said, Allstate can also provide deductible gap coverage to help reduce your out-of-pocket expenses. Like many of the other providers we’ve reviewed, you can receive a free quote from Allstate online, as well as use their search tool to locate an agent in your area.

Moreover, with 47 out of 50 states covered, Allstate serves the most states on this list.^[8]

5. Progressive

Finally, Progressive offers their rideshare insurance as an endorsement to their personal auto policies. While not as extensive as State Farm or Allstate, Progressive provides coverage to 35 states.^[9]

Also, Progressive’s rideshare insurance coverage protects delivery drivers as well—including those who work for Uber Eats, Doordash, among others.

Moreover, Progressive also provides rideshare insurance coverage through their for-hire livery policies. These policies are actually a type of commercial auto policy—and they’re typically used for businesses that transport passengers in luxury vehicles or taxis.

If, however, your state requires commercial auto insurance for rideshare drivers, or standard rideshare insurance isn’t available from Progressive in your state, you might be able to work with them to get coverage from a for-hire livery policy. Because these are commercial auto policies, however, livery policies are typically more expensive than rideshare insurance.

How to Buy Rideshare Insurance

Whether you turn to your personal auto insurer or decide to switch to a new company altogether, most of these providers can offer you a free quote online. To get a free quote online or receive one from an insurance agent, you’ll want to be able to provide the following information:

• Car year, make, and model
• Which ridesharing companies you drive for
• Average number of monthly rideshare trips and average number of miles driven per trip
• Driving record
• Copy of driver’s license (including for anyone else who’ll be driving the car), vehicle registration, and title
• Policy number for your current personal auto policy

If you’re unsure about how many miles you’ll be driving for Uber or Lyft, you can always look up your prior trip history to get an estimate or use a mileage tracking app.

The Bottom Line 

Rideshare insurance is essential if you’re driving for Uber, Lyft, or a similar ride-hailing company. No matter how careful you are or how clean your driving history is, there’s always the chance that an accident could occur or another driver could hit you.

You should always carry proof of insurance while driving, whether for personal use or ridesharing. If you experience an accident, make sure you report the accident to the police and get the other driver’s insurance information. You should file a claim with your personal auto insurance company, as well as with Uber and Lyft’s insurance provider. The insurance companies will work out who pays what part of the claim.

Remember, your personal auto policy won’t work while your rideshare app is on, and the insurance provided by Uber and Lyft doesn’t cover all the gaps. To be covered at all times while driving, you should get a ridesharing insurance extension to your personal auto policy.

Article Sources:

1. Consumer.FTC.gov. “Driving for extra cash? Check your car insurance first.”
2. Uber.com. “Uber Driver Insurance“
3. Lyft.com. “Insurance“
4. NYC.gov. “Get a License“
5. Newsroom.StateFarm.com. “Direct Insurance Coverage Available For Lyft Drivers and Riders in Georgia, Texas and Arizona”
6. MercuryInsurance.com.  “Company Fact Sheet”
7. Allstate.com. “Allstate Ride For Hire®”
8. AllstateNewsRoom.com. “Allstate Makes Ride-Hailing Coverage Available in More States”
9. ProgressiveCommercial.com. “Rideshare Insurance”