When it comes to calculating auto insurance rates, two of the biggest determining factors are the make and model of the car. Since every personal policy is tailored for a particular vehicle, it is natural to assume you are covered whenever you drive that vehicle.
Those who review the terms of their policy know otherwise, though, and those who don’t are likely to learn about certain exceptions the hard way. For example, personal auto insurance policies do not typically apply when motorists are using their vehicles in a commercial fashion, like transporting passengers for a fee.
If they use a ridesharing app like Uber to find passengers, they may have some coverage under the company’s insurance policy; however, it may not necessarily be enough to pay for all the damages that result in a collision. For many Uber drivers, purchasing supplemental coverage provides optimum financial protection.
How Much Coverage Does Uber Provide Its Drivers?
If your personal auto insurance policy does not provide coverage when transporting passengers for Uber, it is essential to review the company’s own coverage limits so you can decide whether you should purchase a supplemental policy. According to Uber’s website, these limits vary depending on whether the driver is waiting for a request, picking up a passenger, or transporting riders to their final destination.
While Waiting for a Request
As soon as you turn on the Uber app, you have liability coverage under their company’s policy. That means if you were to cause a collision while waiting to accept a request, Uber’s insurance will provide at least:
- $50,000 in bodily injury per person;
- $100,000 in bodily injury per accident; and
- $25,000 in property damage per accident.
If you are involved in a wreck that is not your fault, you would likely file a claim with the liable party’s insurance company. If you live in a no-fault insurance state, you might be able to recover compensation from your own insurance provider in such a scenario.
While on the Way to a Passenger
Once you accept a request and hit the road, Uber provides three kinds of coverage: liability to a third party, bodily injury from an uninsured motorist, and collision and comprehensive coverage. The third party liability coverage is for at least $1 million, and the uninsured motorist coverage is up to $1 million.
The collision and comprehensive coverage only applies to drivers who maintain an active personal policy that includes this kind of insurance when they are not working for Uber. There is a $1,000 deductible, and the coverage limit is the actual cash value of the vehicle.
While Transporting a Passenger
Drivers who are actively transporting passengers have the same coverage limits as those who are on their way to pick up riders, but the policy extends to include their passengers, as well. Although the above limits may be enough to cover property damage and bodily injury in most circumstances, catastrophic collisions can cause a lot more than $1 million in damages.
Fortunately, insurers have recognized the growing popularity of services like Uber and now offer rideshare policies for those who want to fill the gaps. In states where rideshare insurance is not available, Uber drivers can purchase a commercial auto policy for optimum coverage.
If you are considering driving for Uber, it is wise to review the terms of your personal auto insurance policy. This will help you decide whether it is necessary to purchase gap coverage before transporting passengers.
Adding rideshare insurance to your current policy might cost a little more every month, but it could ultimately save you thousands—or more—if you were to end up in a devastating crash. Fortunately, rideshare insurance is fairly affordable, especially for motorists who only plan on transporting passengers part-time.