Insightful Auto Insurance Guidance for Rideshare Drivers

Ridesharing organizations such as Lyft and Uber have experienced a significant growth in success and popularity in recent years. More than ever before, drivers are turning to ridesharing as a primary or secondary means of income. Drivers who wish to turn their vehicles into money making tools have much to consider, however, including automobile insurance.

At Hicks Insurance, we help rideshare drivers understand their automobile coverage needs. Our knowledge of the unique risks associated with rideshare relationships allows us to provide the advice and insight you need to protect yourself, your vehicle and your finances.


How Does Auto Insurance Work in a Ridesharing Relationship?

When a driver is on duty, the rideshare process is broken down into three key phases, each with their own unique risks and insurance coverage options.

  • Phase 1 – Waiting: When a driver is not currently on an active ride or responding to a request, they are considered as waiting, or trolling. During these periods between fares, the driver is offered minimal coverage by the rideshare company with which the driver contracts. The driver is responsible for any losses sustained during this period that exceed the coverage offered by the rideshare company.
  • Phase 2 – Responding: The period between a ride request and passenger pickup is referred to as “responding.” While the driver is en route to pick up the passenger, the rideshare company may or may not provide coverage. If a driver is involved in an accident during this phase, they may be liable for their losses and the losses of any other party involved in the incident.
  • Phase 3 – Driving: The period during which the driver has a passenger in their vehicle and is en route to the destination is referred to as “driving.” During the driving phase, rideshare companies offer the most significant amount of insurance coverage. An accident occurring during this phase will likely be covered by the rideshare company’s policy.

It is important to remember that rideshare drivers are often viewed as commercial drivers by insurance providers. This means that a standard auto insurance policy will likely not cover a loss during any phase of the rideshare process.


Adding Protection for Yourself & Your Financial Well-Being

While rideshare companies offer some amount of insurance coverage at each phase of the rideshare process, drivers are often left exposed to legal and financial risks.

  • Gap insurance: Products known as gap insurance cover the difference between a covered loss and the actual costs of an accident. For example, if an accident led to $75k in medical costs and damages, but the rideshare company’s policy offers $50k in coverage, gap insurance covers the difference, or gap. Adding a gap insurance product to your coverage plan is an effective and often affordable way to mitigate risk.
  • Specialized coverage: To match the rise in ridesharing’s popularity, many insurance providers have developed specialized products to cover drivers. The types and amount of coverage vary from product to product, as do the phases of the rideshare process that providers cover.

Exploring all available options to enhance the coverage offered by the rideshare company is key to protecting yourself, your passengers and your career as a driver.


Discuss Your Rideshare Insurance Needs With an Expert

Understanding your insurance requirements and coverage options as a ridesharing driver can be difficult. Our agents have dedicated time and effort to understanding the ridesharing trend, the risks drivers are exposed to, and the coverage options available to them. We’ll help you understand the unique risks associated with rideshare driving and create an effective protection plan.

For a free quote or answers to specific rideshare insurance questions, call us at 708-532-7474 or email our knowledgeable team today.