What Ride-Sharing Drivers Need to Know About Car Insurance

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What Ride-Sharing Drivers Need to Know About Car Insurance on avanteinsurance.com

Do you have the right coverage?

Things now change so quickly, and the economy is perhaps the best demonstration of this. Think about all of the businesses that are so ubiquitous in our lives; companies like Amazon and Google didn’t exist a couple of decades ago, but now most of us probably couldn’t live without them.

The same is true for even newer businesses. It used to be that if you needed a ride somewhere, you’d have to hail a taxi. But thanks to ride-sharing services like Uber and Lyft, those yellow cars are starting to become antiquated. And the nice thing is that this is good for both consumers and jobseekers. However, because this line of work involves their own car, drivers have to be sure they’re protected in case of an accident. This is where the right insurance comes in.

Ride-sharing companies provide insurance coverage, right?

Uber and Lyft drivers are covered under company insurance. However, if there’s an accident and the driver is at fault, it will be his or her personal auto insurance that will be used to cover the damages. The ride-share company’s insurance will then cover the rest. This is why drivers need to know what will or will not be covered. Uber and Lyft have a three-tier system:

Tier 1 – The driver is waiting for a request for a ride from a customer

During this phase, no collision coverage is provided. There is liability coverage, but it is limited: up to $50,000 for injuries and a total of $100,000 per accident.

Tier 2 – The driver has accepted a request for a ride or is going to pick someone up

In this stage, both companies offer liability and collision coverage. The deductibles for collision are $1,000 for Uber and $2,500 for Lyft.

Tier 3 – The passenger is in the car

The same coverage for both liability and collision in tier 2 applies.

Is commercial auto insurance necessary?

If you drive as part of your side gig – perhaps nights and weekends – a commercial auto policy probably isn’t necessary. However, if you do it full-time, your insurance company may insist on it. And if you’re thinking about perhaps stretching the truth about how much you drive, don’t. If they find out you’re lying, you could be dropped altogether.

What about ride-sharing insurance?

In addition to their personal auto insurance, many drivers decide to also get a ride-sharing insurance policy. This provides further protection for you and your car when you’re waiting for requests. And, let’s face it, you’re probably doing that most of the time.

Whether you have yet to take your first fare or you’ve been driving for years, for the sake of both you and your passengers, you need to have the proper insurance. If you’re not sure you have it or you’re unhappy with your current rates, get in touch with Avante Insurance for a free quote.