Driving for Uber or Lyft is probably something you've thought about doing this year if you're looking for a way to earn additional money. After all, there aren't many prerequisites to enter, and you can set your own hours. You may apply to drive for Uber or Lyft and start working rather soon if you're over 21, have a recent car, and don't have any moving violations.
That doesn't mean this side business is risk-free though. Driving people around in your car has real-world financial repercussions if you get into an accident, unlike other ways to make extra money, like freelancing or taking on a formal part-time job.
What kind of coverage is required if you want to drive for Uber or Lyft? In most cases, if you get into an accident while driving for Uber or Lyft, your personal auto insurance coverage won't protect you. In fact, according to NerdWallet, your auto insurer might be tempted to cancel your coverage if they discover that you failed to mention that you are a ride-share driver.
Drivers can get some protection from Uber and Lyft.
In order to protect drivers when their personal insurance policies fall short of doing so, ride-share companies have started their own lines of insurance. That indicates that because it is secondary coverage, you must first submit a claim with your own insurer. Additionally, Lyft's insurance has a $2,500 deductible whereas Uber's is $1,000. But it still beats doing nothing.
Depending on where you are in the ride-sharing process, coverage levels will vary. If you work as an Uber driver, for instance, you will have varying amounts of coverage depending on whether you are waiting for a call, en route to pick up a rider, or driving with a rider in tow.
During the time you are awaiting a request
If you are in an accident and at fault, Uber will cover your liability to a third party while your app is activated and you are waiting for a ride request. A minimum of $50,000 in bodily injury liability per person and $100,000 in total liability per accident are covered. Additionally, each accident, you are liable for $25,000 in property damage, according to Uber. Comprehensive/collision coverage and compensation for harm brought on by uninsured drivers are excluded from this.
Consider purchasing additional insurance in those circumstances to close any gaps in your policy. Individual ride-share policies that cover drivers for firms like Uber or Lyft while they're on the job are now being offered by insurance companies like Allstate, Farmers, and Geico, although these policies aren't accessible in all areas. Commercial auto insurance is an alternative if your state doesn't allow you to purchase ride-share insurance, but regrettably, these policies are frequently prohibitively expensive ($3,000-$5,000, according to the website of Money magazine) for Uber or Lyft drivers attempting to make a profit.
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