uber insurance

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Technology and cultural trends are in constant motion to accommodate our need for speed, ease, and efficiency. One of the recent trends to make its way into many major cities is ride sharing services, such as UberRide-sharing is a convenient, efficient, and safe way to get around when you don’t have a set of wheels or don’t want to drive or worry about parking.

With Uber, if you are a passenger and your Uber driver is involved in an accident, Uber provides $1,000,000 of liability coverage. This coverage will protect you and other passengers in the vehicle if the driver is responsible for an accident that result in injuries. Quite simply, if you decide to use Uber and are involved in an accident, you are protected. It seems to be fairly cut and dry.

Uber Insurance

via Uber

However, if you are a driver of a ride sharing service, your coverage is not so black-and-white. Your personal auto insurance policy clearly states that you are covered only if you are using your vehicle for personal reasons, not for business. Unfortunately, Uber driving falls under “business.”

Uber and Lyft, another ride sharing service, provide liability coverage while a passenger is in your car and your car is being used for their business purposes. What happens when you drop off your customer? Let’s say that you drop off a customer at a destination, and are on route to your next customer when you get into an accident.  Will your personal auto policy cover your liability and property damage or will Uber?

Insurance for Uber Drivers is a Gray Area

Uber Insurance

via Uber


If there is no passenger in your car, Uber will not provide coverage for you, and when you are on route to pick up a passenger, your personal insurance company could deny coverage saying that you were using your car during that time for business purposes.  The gray area of ride-sharing insurance is whether your car is being used for personal or business reasons when it is vacant between transactions.  To be completely protected, ride-sharing drivers should have a commercial auto insurance policy, but commercial policies for livery service can be expensive and cost prohibitive.

Allstate To Offer Ride-Sharing Insurance in 2015

Allstate has announced that it will offer a ride-sharing rider on personal auto insurance policies in a few states, including Texas.  For a reasonable additional premium, policy holders will be able to add rider-sharing coverage to their personal Allstate auto policies.  This coverage is supposed to be available towards the end of 2015.  If you are a ride-sharing driver, you should definitely add this coverage to your personal auto policy.

Do Your Research

If you are interested in becoming a ride sharing driver for Uber or Lyft, it important to be informed. Take a look at your personal auto insurance policy and know if there are limitations or exclusions. Do not be afraid to call your agent, ask questions about your policy, and research steps you should take if you want to pursue being a ride-sharing driver.

Related article: Why Businesses Need Commercial Auto Insurance

More importantly, reach out to the ride sharing company you’d like to work for and find out more about the insurance coverages they offer their drivers.  It’s always a good idea to have information from the company in writing, although I have heard that it’s not always easy to get through to ride-sharing companies.   This may be intentional until the gray regarding insurance coverage for drivers becomes more black-and-white.

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Cheri Roman
Cheri Roman
I’m a graduate of the University of Texas & have a master’s degree in Business Administration from Texas A&M University, Corpus Christi. As a former teacher, I believe in educating my clients about insurance and investment options, and partnering with them to protect their family and achieve their financial goals.

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