State law requires most rideshare companies to provide insurance to their drivers. However, if you use your vehicle for both personal and business purposes, you may want to consider additional coverage to help protect it. We started with a little information about auto insurance policies and coverages, and how insurance companies calculate premiums. If your insurer offers rideshare promotion coverage (major insurance companies offer it), you can buy the coverage you need.
If you have questions about your own car insurance coverage, consult an insurance professional or lawyer with experience in your state. Check out what additional coverages your insurance company may offer and see if the company you are driving for offers any insurance coverage. The insurance coverages we've mentioned here (civil liability, collision and comprehensive liability, UM and UIM, PIP and medical payment) are just a few of those offered by your auto insurance company. Uber and Lyft solved the insurance problem by working together with insurance companies to offer a two-tier insurance coverage plan.
If you haven't disclosed to your car insurer that you also use your car to drive for a rideshare company, the insurance company will likely cancel or refuse to renew your personal car policy. In insurance jargon, PIP coverage is your own insurance, which means that you, the insured policyholder, can file a claim for PIP benefits. In other words, before you can file a claim against the insurance offered by Uber or Lyft, you'll first have to file a claim against your own insurance. Rideshare companies provide some protection to drivers who work, but drivers must also purchase a special type of insurance called a rideshare endorsement to ensure that they have the coverage they need.
To ensure that you have the insurance protection that you and your passengers need, you'll need to purchase a rideshare endorsement separately, with an additional premium, from an insurance company. Second, if you want at least some coverage for your own medical bills (if, for example, you don't have other health insurance or want to cover your health insurance deductible), your options are limited. Uber or Lyft will insure you while you're in the app (see below), but there are gaps in that coverage that you'll want to cover with your own rideshare insurance. As mentioned above, the rideshare insurance solution is a two-tier scheme that involves both insurance companies and rideshare companies.
Normally, these coverages will pay the actual cost of repairing your car or, if your car is a total loss, the actual cash value of your car.