Upstate New Yorkers don’t have to rely on taxi services any longer to get around since the state budget was passed. Now, there’s a popular ridesharing app called Uber that you can use to get a ride. It’s fairly easy to use too. You simply choose the ride you want and set your location. However, without interested drivers, Uber can’t function.
Since this ride-hailing service has exploded, it’s attracted thousands of drivers. Uber provides a great income opportunity with flexible work schedules for people looking to get into the transportation business without having to pay startup costs.
If you’re considering driving for Uber, or even another ride-hailing company, you need to understand how to insure yourself as a driver since you want to ensure you protect yourself, your passengers, and your vehicle during an accident.
Many drivers just assume that their personal car insurance will be good enough. The problem is, when you’re charging to give rides, in the eyes of the law, it makes you a freelancer. Your insurance company likely feels the same way. Insurance companies generally offer a different type of policy for personal drivers, which means they most likely won’t cover your rideshare activities without some tweaks to your personal insurance policy or you purchasing a commercial auto insurance policy.
There are several factors that make insuring ridesharing drivers through personal auto insurance complicated, which include:
- You use your vehicle for both business and personal use.
- Uber and other ride-hailing companies don’t consider you an employee.
- You own the vehicle, not the company.
This leaves many drivers pondering over what to do since commercial car insurance assumes you drive your car for business only and can be more costly and personal car insurance policies don’t provide coverage for your business use of your car.
Since Uber has gained more traction, auto insurance companies have expanded their efforts to provide affordable and adequate ridesharing insurance coverage for its drivers.
Are You Protected as an Uber Driver?
You need to take caution here since the laws of your state influence a lot of factors for insurance coverage. Use this article to give you some insight on the topic, but it’s best to check in with Uber (or other ride-hailing company) and your New York insurance agency to get your state specifics.
Personal Auto Insurance
Your first question is to talk to your insurance company to see f you’re covered by your personal insurance if you’re driving for Uber. The answer is, generally not. Most insurance providers have coverage exclusions for when you’re driving for commercial activities. This includes ride-sharing programs. Most insurers separate leisure-related driving from business-related driving.
Commercial Auto Insurance
There are two ways you can get insurance coverage for your Uber driving:
- Purchase commercial car insurance. This covers liability costs and vehicle damage for accidents that occurred while you were driving on your rideshare time.
- Purchase rideshare-friendly personal insurance. You’ll want to ensure it offers “period 1” (you’re online but waiting for a ride request) coverage that supplements Uber’s insurance. Many companies have limited options for rideshare.
The last thing you want to do is forgo either of these two options. Consider this, on average, vehicle claims are approximately $45,000. Do you have that kind of money just lying around? If not, you’d be smart to ensure you’re fully covered for your rideshare driving.
Uber Car Insurance
Uber does provide some insurance coverage when you have the app on. You’re required by Uber to have your own car insurance, but it does provide supplemental coverage while your app is on. Once you turn the Uber app off, you’re no longer covered by Uber car insurance but your own. Turn the app on and your Uber insurance kicks in again, but remember this is typically supplemental insurance, so it may not provide you with the type of comprehensive or collision coverage you want or need.
Bottom line, if you don’t have full ridesharing insurance coverage and you get into an accident while giving rides for money, any damage or liability costs come out of your wallet. Your insurance company may even drop you if they find out you’re driving for Uber or any other ride-hailing company. This is because when you drive to make money, chances are you’ll be on the road a lot more, which makes you a bigger risk. Personal car insurance isn’t intended to cover this increased risk. Y
ou need to speak with your independent insurance agency to see what their guidelines and coverage options are for your Uber work or if you have to purchase separate commercial car insurance.