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Driving for Lyft or Uber during the holiday season can help you bring in extra income, but you must make sure you’re properly covered so you don’t end up in a financial crisis. Upgrading to rideshare insurance can help fill coverage gaps, keeping you protected on icy roads during busy holiday shifts.
Here’s a look at how rideshare insurance works, what it pays for, and when you must have it to stay protected this winter.
Learn more: How does car insurance work? The basics explained
What is rideshare coverage?
From an insurance perspective, rideshare driving is a business activity and therefore excluded from personal car insurance policies. Rideshare companies like Uber and Lyft provide some insurance for their drivers, but the timing and coverage can leave you exposed to losses.
Rideshare insurance remedies that problem. It provides seamless coverage between your personal insurance policy and the insurance provided by Uber or Lyft. Rideshare insurance from some insurers can also enhance your protections while you have passengers in your car.
Many major insurance companies, including Allstate, American Family, and Farmers, offer rideshare coverage. It can be sold as an add-on or endorsement to your personal car insurance, or you can buy rideshare insurance as a separate, standalone policy.
Learn more: Auto insurance terms you need to know
What rideshare insurance covers
Personal auto insurance typically doesn’t cover rideshare driving, starting from the moment you turn on a rideshare app. Rideshare insurance provides coverage that becomes effective when you log into your rideshare apps. Depending on the insurance company, the coverage remains effective until you accept a trip, or possibly longer.
Coverage types normally available with rideshare insurance include:
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Property damage liability and bodily injury liability: Covers damages caused to someone else’s property or person
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Comprehensive insurance: Covers damage to your vehicle due to severe weather, theft, fire, or another event outside your control.
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Collision insurance: Covers repairs to your vehicle after an accident with another car or object, no matter who’s found responsible
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Uninsured/underinsured motorist insurance: Covers your medical expenses or vehicle repairs if you’re involved in a crash with an at-fault driver without adequate insurance
Depending on the specifics of your insurer’s rideshare endorsement, you may also be able to get additional coverage, such as roadside assistance or rental car reimbursement.
Learn more: Most common types of car insurance explained
What rideshare insurance doesn’t cover
If you purchase rideshare insurance as an add-on to your existing auto policy, it won’t exceed your personal auto coverages. In other words, you won’t get help paying for damages to your car unless you have collision coverage on your policy.
Rideshare insurance coverage also doesn’t pay for injuries of paid passengers or property damage you cause during a paid trip. Those expenses are covered by the insurance Uber or Lyft provides
Yahoo Personal Finance Cost of rideshare insurance
Adding rideshare coverage will increase your premium, but the amount varies by insurer. For example, State Farm says its rideshare endorsement adds 15% to 20% cost to your personal policy premiums; Mercury insurance quotes “as little as $0.90 a day” for rideshare insurance.
Coverage limits and deductibles also vary by insurer.
Learn more: Cheapest car insurance in the U.S. 2025
How does rideshare insurance cover drivers?
Uber and Lyft are known as transportation network companies (TNCs). The insurance they provide is called TNC insurance.
TNC insurance begins when you log into the company’s app. The type of coverage and limits vary by state, but minimally include liability protection for property damage and bodily injury. Both Uber and Lyft insure for at least $50,000 per person and $100,000 per accident for injuries you cause to someone else, plus $25,000 per accident for property damage you cause.
The protections increase when you accept a trip or have passengers in the car. Specifically, the liability limits are higher — at least $1 million in most markets. You may also receive other protections like personal injury protection and uninsured motorist coverage.
Both Uber and Lyft offer comprehensive and collision insurance after a trip has been accepted, but only if you have these coverages on your personal auto policy. The deductible is $2,500. Certain insurers that offer rideshare add-ons for personal policies, such as Progressive, may reimburse you for a portion of the deductible if your personal auto policy deductible is lower.
How your rideshare insurance works with a TNC policy
Here’s how a rideshare endorsement on your personal auto policy works with TNC insurance to keep you covered at all times. Note that some carriers extend some of your personal coverages to the pick-up and transporting phases of your rideshare trips and others do not.
Uber and Lyft insurance requirements
Uber and Lyft require state-mandated liability insurance on any vehicle used for ridesharing. Adding comprehensive and collision to your own policy gives you access to those coverages through TNC insurance while you’re completing trips.
Learn more: Minimum car insurance requirements in all 50 U.S. states
Rideshare insurance FAQs
Does rideshare insurance cover DoorDash and Uber Eats?
Yes, rideshare insurance protects you when you’re a delivery driver for DoorDash, Uber Eats, and Instacart apps. These companies are also considered TNCs. As with Uber and Lyft, your rideshare insurance works with TNC insurance provided by these operators. That said, coverage types can vary based on your insurance company, so always check with your insurer first.
What if I don’t tell my insurance company about my rideshare driving?
Not telling your insurance company about your rideshare driving may be a violation of your policy terms. You can face a claim denial, cancellation, or non-renewal as a result.
Do I need additional insurance if I drive for Uber or Lyft?
You probably need additional insurance if you drive for Uber or Lyft. You would have to check the language of your current policy to be sure, but standard auto insurance typically withholds coverage when you are available for hire on a rideshare app.
What if I cause an accident and a customer gets injured?
Uber and Lyft have accident protocols and liability insurance to cover a passenger’s injury-related expenses. Typically, you must take photos of the damage and report the crash. A claims representative from the rideshare company will walk you through next steps.
Learn more: What to do after a car accident: Your step-by-step guide
Can I use my commercial vehicle for ridesharing?
You can use a commercial vehicle for ridesharing, but you might still need additional insurance. Contact your insurance company to ensure you have the appropriate commercial insurance coverage for transporting passengers.
What does TNC stand for?
TNC stands for Transportation Network Company. Uber, Lyft, DoorDash, and Instacart are all examples of TNCs.
Tim Manni and Jamie Young edited this article.
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