Driving for a rideshare service like Uber or Lyft is one of the fastest growing ways to
make money. Whether you are driving to make a living or just to pick up a little extra
cash, you should be aware that your regular car accident liability insurance may not
provide full coverage in the event of an accident.
The Phases of Rideshare Driving
Insurance policies divide rideshare driving into three phases. Phase 1 is when the
driver is alone in the vehicle but has the rideshare app open and is actively looking
for customers. Phase 2 is the period between accepting a fare and picking up the
passenger. Phase 3 is when a passenger is actually in the car. These various phases
are treated differently by insurance policies, and you have to make sure you have
comprehensive coverage during all phases of the ride.
How Insurance Covers You
Uber and Lyft generally provide collision coverage during phases 2 and 3 of the ride,
but not during phase 1. Furthermore, the deductables on the insurance provided by
Uber and Lyft are generally very high, which means that you may still end up paying
quite a bit out of pocket if you are involved in an accident.
A third-party insurance policy provides valuable coverage for the gaps left by Uber
and Lyft’s coverage. A designated rideshare policy covers you during all the extra
driving you may be doing during phase 1 of the ride. It also offers additional
coverage to help lower your deductable if you are involved in an accident during
phase 2 or 3.
Anyone who drives for a rideshare company should consider a designated insurance
policy that covers you in the event of a ride sharing car accident. In response to this
emerging industry, many insurance companies now offer rideshare policies that are
very affordable and easy to add to your existing policy.