What Does Rideshare Insurance Cover?

A personal car insurance policy normally does not cover “commercial use” of a vehicle if you drive for a ridesharing firm like Uber or Lyft. In other words, if you’re involved in a car accident while on the clock, you may be responsible for paying for things like vehicle repairs or the medical bills of an injured individual.

 

In most states, ride-sharing firms are required by law to provide insurance for their drivers. As an alternative, if you use your vehicle for both personal and professional reasons, you may want to consider purchasing additional insurance. The following are some things to bear in mind when it comes to ridesharing insurance, often known as ride-hailing insurance.

 

HOW TO OBTAIN INSURANCE FOR RIDESHARE SERVICES

 

If you already have a personal auto insurance policy, you may be able to supplement it with a ride-hailing insurance endorsement from a particular carrier. Extra coverage provided by this endorsement may assist bridge the gap between your commercial auto insurance policy and your personal auto insurance policy if you drive for a ridesharing firm (also known as a transportation network company, or TNC).

 

Another choice is a full ridesharing insurance policy, which covers both personal and business use of a vehicle under a single policy.

 

There is a wide range of insurance costs, coverage types, and policy limitations available from different insurers and from state to state. There are a variety of solutions available in your area, and an insurance agent can help.

 

The RIDESHARING COVERAGE GAP: BUSINESS USE VS. PERSONAL USE

 

Major TNCs, according to the National Association of Insurance Commissioners (NAIC), offer its drivers who use personal vehicles to conduct TNC operations limited commercial insurance. When a driver is en route to pick up a passenger or has a passenger in the car, it is acceptable to use the vehicle for business purposes.

 

A driver may not be protected by either policy while he is available for hire but has not yet accepted a ride request because personal automobile insurance often excludes business use. A ridesharing endorsement may be able to fill that void. During the “app on” period, when you’re waiting for a ride request, it extends some coverages on your personal policy.

 

As a result, if an accident occurs while you’re waiting to be hired, the ridesharing endorsement may assist you avoid paying out of your own cash for related expenditures. Be aware that you will not have collision coverage under the endorsement if you don’t have it on your personal policy. If you get into an accident while you’re waiting for a ride, you’d be responsible for the whole cost of the damages to your own vehicle. In the same way, if you don’t have full coverage on your own policy, you won’t have it under the ridesharing endorsement either.

 

A DEDUCTIBLE GAP IN TNC COVERAGE

 

When it comes to paying a TNC insurance policy’s high deductible, a ridesharing endorsement may also help you save money. If you get into an accident while driving for a TNC, you’ll likely have to pay the deductible on the company’s commercial insurance coverage.

 

A deductible is the amount of money you are responsible for paying before your insurance company begins paying on a covered claim. The deductibles for collision and comprehensive insurance are distinct. Deductibles on a personal auto insurance policy may be allowed to be set at $500 each in the collision and comprehensive sections.

 

The deductibles for collision and comprehensive coverage may be greater when you drive for a TNC under its business insurance policy, for example, $1,000 or $2,500. While driving to pick up or transport a passenger, you’d be responsible for paying the TNC deductible out of your own cash before commercial insurance benefits would kick in to assist you repair your vehicle.

In this situation, a ridesharing insurance endorsement may help bridge the deductible difference between your own auto coverage and the TNC policy. It’s possible that you’ll save money on your collision policy deductible by using the ridesharing endorsement when yours is $500 and your TNC’s is $1,000.

 

The Insurance Information Institute recommends speaking with your TNC about the types, limitations, and deductibles of coverage before applying to be an Uber or Lyft driver.

 

If you’re not sure what kind of coverage your ride-hailing firm offers, ask to your insurance agent about getting a ridesharing insurance endorsement to fill in the gaps.

 

What is the cost of rideshare coverage?

 

Insurance premiums for ride-sharing services vary greatly depending on the type of coverage you purchase. It is possible that a rideshare endorsement will save you money over and above the cost of a separate rideshare insurance policy.

 

The bigger your deductible, the more expensive your insurance is going to be. Because of the rideshare endorsement, your rideshare coverage limit is normally the same as your regular auto insurance policy limits. As a result, if your standard policy’s liability limit is $100,000, the highest your policy will pay in a covered rideshare insurance claim is also $100,000. If you decide to purchase a rideshare insurance policy on your own, you’ll probably have to set certain restrictions.

 

You can get a rideshare insurance quotation from a local insurance agent who can tell you what coverage options are available to you. Once you’ve obtained the insurance you require, you’ll be able to provide rideshare services to others with greater confidence.

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