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How to Get Uber Car Insurance

uber car insurance


If you're considering becoming an Uber driver, your first question might be: what type of car insurance is required? There is a good deal of misinformation and ignorance floating around out there about this question.

As the sharing economy continues to grow, rideshare companies like Lyft and Uber become more and more popular. In 2016, Uber had an estimated 40 million plus annual riders [1]. In the following, we'll break down the ins and out of insurance for this type of driving. We'll look at:

How Does Uber Work?
Does Uber Provide Car Insurance For its Drivers?
What Are The Car Insurance Requirements?
Rideshare Insurance or Commercial Auto Policy?
What Happens if You Have a Car Accident?

Let's get started….

How Does Uber Work?

Uber is a ride-sharing service that competes with taxis and other car rental services. Passengers hail a ride from the smartphone app and arrange for a car to pick them up. Drivers with the app serve as makeshift taxis to provide the ride.

This is often more convenient and cheaper than traditional options. They also have products such as UberX or UberPool, which cater to luxury and budget customers. Although there are many companies competing in ridesharing, Uber is one of the original and biggest there is.

Does Uber Provide Car Insurance For its Drivers?

In short, yes. But the coverage offered by the company may be insufficient to properly protect you. Since 2013 Uber has implemented a $1 million commercial liability policy.

The intent of this policy is clear if you're a rider -- you're covered for any injury up to $1 million dollars. For drivers, the situation is less clear.

From the official website:

“Comprehensive and collision are covered under a separate policy and include $50,000 of contingent comprehensive and collision insurance. If a ridesharing driver maintains personal comprehensive and collision insurance, this policy covers physical damage to that vehicle that occurs during a trip, for any reason, up to $50,000 and with a $1,000 deductible.”

Unfortunately, rideshare drivers are covered only when the application is engaged (meaning driving to pick someone up or with a rider in the car). Personal insurers may deny you coverage or raise rates if they find out you're working in rideshare. Also, $1,000 for a collision deductible is rather high.

What Are The Car Insurance Requirements?

Uber does not mandate any particular dollar figure for policy limits of their drivers. They do however require that you are a legally registered and insured driver in the state you're operating in -- some states will also require you to get a commercial driving license.

To qualify, you must meet the following standards:

  • You must provide a photo of the vehicle's registration even if the car isn't registered in your name
  • Your name must be listed on the vehicle's insurance card or declaration
  • Your insurance must be in-state. There are some exceptions for markets near the border of two states[3].

Rideshare Insurance or Commercial Auto Policy?

The risk a rideshare driver may face is a gap in coverage when not performing commercial driving operations -- and the potential penalty. There are two possible solutions.

You could purchase a commercial driving insurance policy -- but these can be prohibitively expensive. They also tend to have higher limits on liability. A better option is to find a personal plan with rideshare-friendly add ons.

At this point, most of the major insurance carriers offer options that cater to the rideshare driver. These plans will take care of any coverage gaps. But since you can't get rideshare insurance from a different insurer (as stand alone coverage), it would be a good idea to shop around -- there may be better options worth switching for.

It's best not to tempt fate and forgo additional coverage (even if an estimated half of Uber drivers are not properly insured [4]). Doing so opens you up to considerable liability and the possibility of facing a claim against you with no policy to back you up.

What Happens if You Have an Car Accident ?

Treat an accident driving for work as you would any other accident. Stay calm and use your best judgment. First and foremost, check to see if anyone is injured, move the car to a safe location (if possible), and call the police.

If no paramedics are required, and the situation is under control, contact the company via 1-800-353-UBER which puts you in contact with a response team available 24/7.

Collect information, document the scene as best you can and don't discuss fault. The response team member will reach out to you to confirm everyone's safety and record the details of the incident. You should also contact your personal insurer and report the accident as well.

Summary

Uber is the undisputed king of the ridesharing industry. If you plan to work with them, don't be part of the (estimated) 50% of drivers doing so without proper insurance coverage. All the insurance details may sound complicated, but when you boil it down, things are simple.

  • Uber is a mobile application based ridesharing platform that allows drivers to make money on a freelance basis. It gives riders a service that is inexpensive and convenient.
  • They do provide liability and collision insurance, but this is not valid at all times, and the deductibles can be quite high.
  • You need to meet your state's insurance requirements to drive for this company; it's recommended to get a policy with a rideshare amendment to ensure you're covered.
  • If you get in an accident, take practical safety steps: call the Uber emergency line and get in touch with your private insurer.


Sources:

1 - Fortune
2 - Uber
3 - RideSharingDriver
4 - Inquirer


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