What Car Insurance Coverage Do I Need?

Decide how much liability coverage is enough for similar type of drivers.

How Does Car Insurance Work for Uber Drivers?

Millions of drivers around the country and the world utilize rideshare services as a way to supplement their income, with many using these services for their primary source of income as well. People who are operating their own small business need to be aware of the laws they need to follow. Insurance is essential for people who are using Uber as drivers. While the company does offer its own insurance to its drivers, there are several gaps in this coverage. Being aware of how to protect yourself best as a driver is essential.

How Uber Works

Uber is a service that allows customers to hail a ride from people who are using their own vehicles to transport them around for payment. The passengers use the Uber app to hail a car. Their payment information has already been taken and verified by Uber, so no money needs to change hands. This includes the ability to use the app for tipping. In many cases, the charges that Uber and other rideshare services charge are less than that of traditional taxis.

The company does utilize some commercially licensed car services, and it also has a product called UberX. One of the similarities that Uber has with taxi car services is that they do not own the vehicles being used. The drivers are not directly employed by them, either. That said, almost anyone can drive for rideshare services like Uber, Sidecar, Lyft, and others.

Uber Insurance Basics

In some areas, the only thing that is required to be a rideshare driver is the appropriate type of insurance, the appropriate age, a background check, and the completion of the driving test. Standard car insurance providers often have an option for people who are looking to purchase car insurance that works both commercially for rideshare drivers, as well as while the vehicle is being used for personal reasons. In many cases, it is as simple as checking off the box when you go to get auto insurance quotes.

What It Costs

Car insurance can vary from one city and state to another, and a person’s age, gender, and driving record also have an impact on the rates a person will pay. Each state has different requirements in terms of the minimum amount of car insurance required for rideshare drivers. People who use Uber and other rideshare services need to be aware that if they do not have rideshare insurance on their vehicle, they may have their plan canceled or their claim denied.

Rideshare insurance covers more than the minimum required insurance in most states. Your personal car insurance policy might not provide payments if you drive for a rideshare service and do not have the appropriate type of policy. Most standard policies have an exclusion for driving for hire and do not cover it. Make sure to check with your auto insurance provider to confirm if your plan will cover this type of commercial driving. If not, consider getting supplemental insurance to cover yourself.

More Information About Uber Auto Insurance Coverage

As a company, Uber has requirements in place that all of their drivers have automobile insurance. Also, the company provides supplemental auto insurance coverage. This is only available when the app is on, however. When a person turns the Uber app on, they are covered by the Uber auto insurance coverage. Once the Uber app is turned off, their car insurance coverage kicks in. 

Even with Uber car insurance coverage, it is highly recommended to get additional coverage for the times you are working. The coverage that the Uber app provides when it is on is a low level of liability insurance. When a trip is accepted, a higher level of coverage kicks in, however. This coverage remains active until the passenger's exit the vehicle. This means the higher level of coverage is still not active all of the time.

Tips For Getting Uber Insurance

It is important to keep in mind that liability insurance coverage will not cover specific types of damages. Damage to a driver’s car, as an example, is not covered under the Uber plan, nor is it covered in most states when it comes to the minimum required amounts of automobile insurance. Since you are relying on your personal auto insurance policy for this type of coverage, selecting a plan that protects you financially in these types of situations is important. People who are on the road more often are more likely to get into an automobile accident.

Some states do require people utilizing the UberX service, which is a more premium service, to have a commercial driver’s license. Even being an independent contractor, these states may consider you to be a commercial driver. Each state has different laws, so make sure to verify if you will need a CDL, or commercial driver’s license, in your state. The local DMV will be able to give you the information that you need.

People who do not have a CDL license and are required to have one can face stiff fines, fees, and penalties. If you are thinking about becoming a rideshare driver through a service like Uber, make sure to be honest with your auto insurance company that you will be a driver for hire. Car accidents can add up quickly in terms of expenses, and being honest is the best way to make sure you have a policy that will cover your needs if an emergency occurs.

Final Notes

Drivers who are planning to use Uber or other rideshare platforms to make money do not necessarily need to go to a special company to get car insurance. The free quote tools at Cheap Auto Insurance will have an option to verify yourself as a rideshare driver to the company you are looking to get a quote from. It is recommended to get at least four quotes for car insurance to help you find the best prices for rideshare insurance available. Compare the policies line by line and get the best one to suit your needs. Make sure you are getting enough automobile insurance to protect your interests at Cheap Auto Insurance.

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