Rideshare Insurance for Uber and Lyft Drivers

If you drive for Uber, Lyft, or any other ride-hailing platform, there's a good chance you have a coverage gap you don't know about. Your personal auto insurance policy almost certainly excludes commercial activity — and the moment you turn on your rideshare app, you're technically operating a commercial vehicle. Here's what rideshare drivers need to understand about insurance and how to close the gap.

The Rideshare Insurance Gap Explained

Rideshare driving creates a unique insurance problem because it falls between personal and commercial use. Here's how coverage typically breaks down across the three phases of rideshare driving:

• Phase 0 — App Off: Your personal auto policy covers you as usual. No issues here.
• Phase 1 — App On, No Ride Request: You're waiting for a ping. Your personal insurer may deny claims during this phase because you're engaged in commercial activity. Uber and Lyft provide limited liability coverage (typically $50,000/$100,000/$25,000), but no collision or comprehensive.
• Phase 2 — Ride Accepted, En Route to Pickup: Uber and Lyft increase their liability coverage (usually $1 million), and contingent collision/comprehensive kicks in — but only if you already carry those coverages on your personal policy.
• Phase 3 — Passenger in the Car: Full $1 million liability coverage from the rideshare company, plus their collision and comprehensive (subject to a deductible, often $1,000–$2,500).

The dangerous gap is Phase 1. If you're in an accident while the app is on but you haven't accepted a ride, you could be left with minimal coverage from both your personal insurer and the rideshare company.

How Rideshare Insurance Fills the Gap

A rideshare endorsement (sometimes called a TNC endorsement) is an add-on to your personal auto policy that extends coverage to Phase 1 driving. It typically costs $15–$30 per month — far less than a full commercial policy — and ensures you're never driving without adequate protection.

Some insurers also offer hybrid rideshare policies that provide seamless coverage across all phases. These policies treat rideshare driving as a covered use from the start, eliminating the patchwork of personal-plus-company coverage.

Not all insurers offer rideshare endorsements, which is why it's important to work with an agency that can compare options across carriers. Truvo works with multiple insurance companies and can find you a policy that covers your rideshare driving without breaking the bank.

What Uber and Lyft Insurance Doesn't Cover

Even during Phases 2 and 3, the rideshare company's insurance has limitations:

• Your Deductible: Uber and Lyft's collision coverage comes with a deductible of $1,000–$2,500. You're responsible for that amount out of pocket.
• Your Vehicle's Full Value: Their coverage is contingent — meaning it only pays if you carry collision and comprehensive on your own policy. Drop those coverages personally, and the rideshare company won't cover your vehicle damage either.
• Lost Income: If your car is in the shop after an accident, neither Uber nor Lyft compensates you for the rides you can't give. Some rideshare-specific policies include rental reimbursement to keep you earning.
• Personal Belongings: Items stolen from or damaged in your car during rideshare driving typically aren't covered by the company's policy.
• Uninsured Motorist Gaps: Coverage varies by state, and some drivers find that UM/UIM protection is thinner than expected under the rideshare company's policy.

Tips for Rideshare Drivers

1. Tell Your Insurer: Never hide your rideshare activity from your personal auto insurer. If they find out after a claim (and they will), they can deny the claim and cancel your policy entirely.
2. Get the Endorsement: The $15–$30/month for a rideshare endorsement is one of the best investments you can make as a gig driver. It eliminates the Phase 1 gap entirely.
3. Track Your Miles: Keep a log of personal vs. rideshare miles. This helps at tax time and can also be useful if you ever need to file a claim.
4. Consider Umbrella Coverage: If you drive frequently, a personal umbrella policy adds an extra layer of liability protection beyond what Uber/Lyft and your auto policy provide.
5. Compare Annually: Rideshare insurance is a growing market, and new options appear regularly. What was the best deal last year might not be this year.

Conclusion

Driving for Uber or Lyft can be a great way to earn extra income, but only if you're properly insured. The gap between personal and commercial coverage is real, and it's exactly where accidents love to happen. A rideshare endorsement or hybrid policy closes that gap affordably. Want to find out what rideshare coverage would cost for your situation? Get a free quote from Truvo and drive with the confidence that you're fully covered — no matter which phase you're in.