Rideshare drivers may not be fully covered for collisions!
It seems as if the popularity of ridesharing apps such as Lyft, Uber, or Sidecar has exploded! While they’re easy to use to get to and from your destination, they have very complicated insurance rules. If you’re a rideshare driver, you may not realize that you might not be fully insured. Rideshare companies do not fully cover you, and your personal auto insurance policy doesn’t cut it. If you’re a rideshare driver, you need special Period 1 coverage!
It wasn’t until recently that these companies like Uber and Lyft started providing some insurance coverage for their drivers. At first, personal insurance was covering collisions of Uber drivers. However, as the apps gained popularity, more insurance agencies realized that rideshare driving was a high-risk commercial endeavor and they stopped coverage. In fact, they even cancelled personal auto insurance policies of many Uber and Lyft drivers. Insurance fraud increased as a result, as drivers were less willing to admit that they had been driving for a rideshare app for fear that they’d lose their insurance.
Eventually, rideshare companies stepped in and offered coverage. But it wasn’t full coverage. There are three separate periods involved in rideshare driving. There’s Period 1 where a driver is waiting to match with a passenger, Period 2 where the driver matches with a passenger and goes to pick them up, and Period 3 where the passenger is driven to their desired location. The rideshare company policies only cover Periods 2 & 3. Period 1 is left up to the driver. Unfortunately, due to high risk of accident and the use of multiple apps at once during Period 1, it’s been nearly impossible for drivers to find a policy to cover them.
That’s when lawmakers stepped in. Liability insurance is now mandated by law for rideshare drivers, and insurance agencies are now offering coverage.
The only way to get coverage for Period 1 is to purchase a new insurance policy specific to rideshare apps. Some states, like Illinois, offer pay-per-mile options where coverage spans the mileage driven during personal driving and during Period 1.