Did you know the standard homeowners’ insurance policy does not cover damage caused by flooding? Those who have purchased a house in a designated flood zone may be aware of this limitation because they had to buy coverage from the National Flood Insurance Program; however, people who live in relatively dry areas—like Texas—may not even realize the need for a supplemental policy until a disaster occurs.
Car insurance also has considerable limitations in certain scenarios, but only those who review the terms of their policy closely may be aware of them. For example, if you use your personal vehicle for any kind of commercial purpose, your coverage would likely not apply in the event of a crash.
This includes transporting passengers for ridesharing companies like Lyft. Although it is wise to purchase supplemental rideshare insurance or a commercial auto policy if you plan on transporting passengers in your personal vehicle, companies like Lyft do provide some coverage for their drivers in the event of a collision.
Lyft’s car insurance policy includes contingent liability, auto liability, contingent comprehensive and collision coverage, and UM/UIM coverage.
How Much Coverage Does Lyft Provide Its Drivers?
Lyft has four kinds of coverage for its drivers. These are:
- Contingent liability;
- Primary automobile liability;
- Contingent comprehensive and collision; and
- Uninsured/underinsured motorist coverage.
Contingent liability applies as soon as you sign into the app and remains in effect while waiting for a ride request. The other three kinds of insurance apply from the time you accept a ride request to the time you drop off any passengers at their destination.
Contingent Liability
When you are in driver mode but have not yet accepted a ride request, Lyft will provide contingent liability coverage. The limits for this policy typically include:
- $50,000 in bodily injury per person;
- $100,000 in bodily injury per accident; and
- $25,000 in property damage per accident.
The precise limits may vary in order to comply with local insurance regulations. Regardless, there is no deductible for filing a claim under this policy.
Primary Automobile Liability
Lyft’s primary automobile liability coverage has a limit of $1,000,000 per accident. This policy applies to all Lyft drivers, including those who have their own commercial insurance or personal ridesharing policy.
Contingent Comprehensive and Collision
Lyft’s contingent comprehensive coverage only applies to drivers who already have this type of insurance on their own personal policy. It will pay for property damage that occurs to your vehicle in a non-collision incident, like vandalism or fire.
This policy has a $2,500 deductible and reimburses claimants for the cost of the repairs or the actual cash value of their vehicle. Fault does not affect eligibility for comprehensive coverage.
Lyft’s contingent collision coverage is also limited to motorists who have such coverage on their personal policy. This insurance will pay for damage to the vehicle following an accident.
The deductible is $2,500, and the policy’s total limit is the actual cash value of the car. This coverage applies regardless of fault.
Uninsured/Underinsured Motorist
Uninsured/underinsured coverage applies when a Lyft driver is involved in an accident in which the at-fault motorist does not have adequate car insurance to cover the damages. This policy will pay for up to $1 million in damages per incident and does not require a deductible from the claimant.
Driving for Lyft can be fairly lucrative—as long as you protect yourself in the event of a collision. Although the above policies provide a certain amount of financial protection, some only apply if the motorist already has adequate insurance coverage, and others may not be enough to pay for all the damages following a catastrophic crash.
Fortunately, finding affordable auto insurance and supplemental policies like rideshare or commercial coverage is easy if you know where to look. As long as you do a little research prior to accepting your first passenger, driving for Lyft could be the perfect way to make some extra money.