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Do You Drive For Uber or Lyft? Does Your Auto Insurance Cover You?

Are you considering on becoming an Uber or Lyft driver? Or are you a driver already? In either case, you can earn extra cash and you may even be thinking of your car insurance coverage. Would your auto insurance carrier pay out if you had an accident? This is a question we have been getting lately from our clients.

Uber and Lyft are both ride-sharing service, that compete with taxis and black car services. Passengers hail a ride from the smartphone app and arrange for a car to pick them up, often for a cheaper cost than a regular taxi.

To become an Uber or Lyft driver the only requirements you need to meet are; having auto insurance, be the appropriate age, be healthy, complete a driving test and pass a background check.

How Insurance Works With and Without the App On

Your personal auto insurance policy may not provide coverage for you drive for Uber or Lyft. Personal auto insurance policies have a list of exclusions that include “driving-for-hire.” Please check with your insurance company to see if you are covered or not.

In our agency we have a couple of insurance companies that we can add an endorsement (extra coverage) to help with this exclusion (also known as “grey area”). The endorsement covers you when have the Uber or Lyft app ON and you are waiting for a match ride.

Once you accept a ride and you have the passenger in the car your personal insurance is no longer valid, and you are covered under Uber’s or Lyft’s insurance policy to a certain extent. Both Uber and Lyft include a $1 million in liability coverage per incident. This only applies for when you, the driver, has a passenger in the car with you.

What Happens If You Have An Accident?

You just picked up a passenger and as you are driving you accidentally rear end the car in front of you at a traffic light. Are you covered for this? According to, Uber and Lyft, as long as you have a passenger or you are on your way to pick up a fare, Uber and Lyft will cover medical expenses and other damages up to $1 million, even if an uninsured or underinsured driver is involved. This million-dollar limit is much higher than most drivers carry.

You are also allowed to draw on the comprehensive and collision coverage offered by the ridesharing company, as long as you care that coverage on your personal insurance. Take caution though, deductibles are high and the policy only applies while you are carrying a passenger.

If you have an accident while waiting for a fare, you will need to file a claim with your personal insurance carrier unless your state law or ridesharing endorsement specifies otherwise. If this type of claim is denied or you are not fully reimbursed, coverage from Uber and Lyft may kick in, but ridesharing companies’ limits are low.

Frimark/Keller & Associates is here to help you with your auto insurance options. Give us a call at 847-907-4520 to talk things over and we can figure out what will work best for you.


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