Ridesharing is a common way to earn extra money in this economy. There are several different companies that do ridesharing, such as Uber or Lyft. The general idea of ridesharing is that someone needing a ride will be connected through a mobile app with someone who has been vetted by the rideshare company and is available to drive them for a fee.
Many of us have heard both favorable and unfavorable stories from individuals who have used a rideshare service. However, right now we will only focus on what drivers need to know. If you drive for a ridesharing company or are entertaining the idea of becoming one of their drivers, here is what you will need to know from an insurance perspective.
There's Probably a Gap in Your Coverage
Ridesharing companies like Uber or Lyft offer insurance coverage while you are driving with a passenger. For more specifics on what they cover and when, it is a good idea to check out the website of the particular company you're interested in driving for.
Read the Fine Print in Your Auto Policy
However, most personal auto policies will not cover you while you are driving for a rideshare. In fact, your auto policy coverage stops the moment you turn the app on to indicate you are available to pick someone up.
Most auto insurance policies have a clause that prevents you from using your car as a carrier or delivery service, ridesharing included. That means you could drive to your day job and be covered like you would expect, but if you decide to pick up ridesharing clients after work, your coverage ends as soon as you indicate you are available for pickup on the app.
A Couple of Options are Available
There are a couple of insurance carriers that offer a solution for drivers providing rideshare services. The current solution for this gap in coverage is to get a ride share endorsement added to your policy.
This will help if you get into an accident while you are waiting to pick someone up for a rideshare. Otherwise, it is something you could be solely responsible for. Many people are considering ridesharing services as a way to supplement their income, and insurance may not be the first thing on your mind if you do. It is important to ask your insurance agent what coverage options are available to you, specifically for the ride share endorsement.