If you’re thinking of earning some extra cash by driving for a rideshare service, it’s a good idea to purchase rideshare insurance. How much is rideshare insurance? That depends on what provider you purchase a policy from and how much coverage you buy.
What is Rideshare Insurance?
According to Progressive, rideshare insurance is a policy designed to meet the needs of drivers who work for services such as Uber and Lyft. Most insurance providers let you purchase rideshare insurance as a hybrid insurance package or you can add it to your current insurance policy. Typically, a rideshare policy covers damage to your vehicle and medical care for you and your passengers, and it’s less expensive than conventional commercial insurance. If you drive part-time, rideshare insurance offers you the flexibility not available with commercial insurance.
Progressive notes that while rideshare services and delivery app services might provide limited insurance to their drivers, it usually only covers you when you have a passenger in your car. Purchasing additional rideshare insurance covers those gaps that occur when you’re waiting to match with a passenger or on your way to pick up a passenger. There are a few risks that come with forgoing a rideshare policy, including:
- Getting dropped by your insurance provider from your personal policy
- Gaps in coverage during your shift
- Having to pay out of pocket for damages
You don’t want to have to pay out of pocket because of coverage gaps, especially if you’re trying to pay off student loans, saving up for a vacation, or trying to cover household expenses.
Types of Rideshare Insurance Policies
According to Insurify, when purchasing rideshare insurance, drivers can typically select one of the following:
- Additional Protection: This type of policy usually comes in the form of gap coverage. That means it covers everything that your rideshare service-provided policy doesn’t. When you’re on your shift, but you don’t have a passenger in your vehicle, that’s when your additional protection kicks in.
- Personal Insurance Coverage Extension: This type of coverage extends your personal insurance coverage so that it protects you while you’re on your rideshare shift. Keep in mind that it only extends the coverage you already have. For example, if you don’t have collision coverage on your personal policy, then you won’t have collision coverage when you’re on your rideshare shift.
- Hybrid Insurance Package: This type of coverage combines your personal and rideshare policies into one policy under a single premium. A hybrid policy covers you whenever you’re driving your vehicle, whether for business or pleasure.
How Much Is Rideshare Insurance?
How much you end up paying for rideshare insurance depends on how much coverage you purchase. Nerdwallet points out that extending your personal policy usually costs less than purchasing a hybrid insurance package. Your liability limits also factor into the cost of a policy, meaning the higher the limits, the more you’ll pay. If you choose to extend your personal coverage, your rideshare limits will typically match your personal policy. For example, if your current policy carries a $100,000 liability limit, then your rideshare extension will also have a $100,000 liability limit.
Nerdwallet also notes that because rideshare insurance is only sold as an extension or as a hybrid package, you can only purchase it from your current provider. For example, if you have a personal car insurance policy with Allstate, you can’t purchase rideshare coverage from Mercury. When deciding between a personal policy extension or a hybrid package, you should do the following:
- Let your provider know that you’re driving for a rideshare policy.
- Determine the gaps between your current policy and the policy offered by the rideshare service you’re driving for. While Uber and Lyft provide up to $1 million in liability coverage when a driver is transporting packages, smaller companies typically offer less coverage.
- Compare quotes for a rideshare package and conventional commercial insurance. Usually, rideshare insurance is cheaper, but you won’t know for sure until you compare quotes.
In a survey of leading insurance providers, Nerdwallet gathered quotes to see how much they charge for rideshare coverage. Here’s what they found:
- Allstate: $20 a year
- Erie: $9 to $15 a month
- Mercury: Starts at $27 a month
- Safeco: $10 a month
- State Farm: 15 to 20 percent of a driver’s current premium
- USAA: Starts at $6 a month
The Best Insurance Providers for Rideshare Drivers
When deciding which rideshare insurance provider is best for you, it’s essential to choose the one that most meets your driving needs. Investopedia looked at some leading providers and weighed the pros and cons of each one. They report that a rideshare policy from GEICO:
- Covers you whether you’re off or on the job
- Doesn’t restrict your mileage
- Covers delivery service shifts
- Is slightly more pricey than other plans
- Is not available in every state.
GEICO’s rideshare plan is a hybrid package that covers your vehicle when you’re using it for business or pleasure. That means you don’t have to file a claim with the rideshare service you drive for in the event of an accident. Your package with GEICO will cover the costs.
When analyzing Mercury’s rideshare coverage, Investopedia found that it:
- Starts at $27 a month
- Covers mechanical breakdowns
- Covers you no matter which rideshare company you work for
- Is only available in three states
- Does not allow you to file claims online
Mercury’s policy is a gap coverage policy, meaning that it covers you while you’re on your shift until you pick up a passenger.
Finally, Investopedia looked at State Farm’s rideshare coverage. A State Farm rideshare policy:
- Is available in most states
- Covers delivery service drivers
- Does not restrict mileage
- Only covers gaps in service-provided policies
- Costs more than similar plans from other providers
Because State Farm’s rideshare plan is designed to cover the gap between your personal policy and the policy provided by the company you drive for, it’s recommended for part-time drivers.
Now that you know how much rideshare insurance costs and what types of plans are available, you can make an informed decision when buying a policy. With this information, you’re sure to find excellent coverage at a reasonable price.
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