What Car Insurance Coverage is Needed to be an Uber Driver?

December 24, 2021

If you have a car, you likely have car insurance. You probably figure that you are covered if you decide to become an Uber driver. We are here to tell you that is not the case. On most insurance policies, any vehicles used for business purposes aren’t covered, this includes rideshare businesses.

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What’s the Risk?

You might wonder why insurance companies care if you drive an Uber. Driving is driving, right? It all comes down to the risk the insurance company takes insuring you. When you drive for a ridesharing service, you likely spend more time in the car than you would for leisure or everyday purposes. For example, if the weather is bad, you may not drive if you are just going out and about in town. If you drive for a ridesharing service, though, you have to go out, rain, snow, sleet, or shine. This increases the risk of an accident or other incident occurring, putting the insurance company at risk.

Does Uber Provide Insurance?

Uber does provide car insurance, but its coverage is less than optimal. It helps to know what instances they might cover your loss and when they wouldn’t cover it.

Waiting for a request – If you have the Uber app on and are waiting for a request, Uber’s insurance may cover any damage you cause to another person or person’s property. This does not cover your car or property though.

While driving to pick up a rider or transporting a rider – If you get into an accident or have another incident while driving for Uber, they may cover the damage done to you, your car, any other parties, any other property belonging to others

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It’s important to note, though, Uber only provides limited coverage. They also only provide this coverage if you have your own personal coverage. In other words, you need car insurance for times you aren’t using your car as a ridesharing business.

Ask About Rideshare Insurance

When you start driving for Uber, it’s imperative that you let your car insurance company know that you are working for a rideshare service. If you skip this step and something happens, the insurance company could deny coverage due to fraud. They expect full disclosure if a driver starts using his/her vehicle for business purposes.

Some car insurance companies offer rideshare insurance. This varies by company, so you’ll have to ask around. If they do offer it, this can serve as gap coverage between what your personal insurance policy might cover and what the Uber policy might cover. If your insurance company doesn’t offer rideshare insurance, your next best bet is to secure commercial car insurance.

The Coverage Uber Provides

It’s important to know the coverage Uber provides so you know what to expect and what you may need to supplement. Keep in mind, these coverage amounts are minimal, as the actual coverage may vary by state:

Waiting for a request – $50,000 liability coverage per person and $25,000 for property damage

Driving for Uber – $1,000,000 coverage for damage done to other people or properties; $1,000,000 for uninsured or underinsured drivers that are at fault in your accident; collision and comprehensive coverage (maximum value of your vehicle)

The bottom line is that you need car insurance for your car if you are an Uber driver. Don’t rely on the insurance provided by the rideshare company alone, as they require you to have a personal policy. Pay close attention to any gaps that may exist and talk to your insurance agent about how to cover those gaps.

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