Ride share driver GPS on dashboard

Do I Need a Separate Auto Insurance Policy If I’m Driving for Uber, Postmates or Work?

Gone are the days when seeing an Uber on the road was a novelty – more than one-third of Americans have used the ridesharing companies’ apps for a lift, and an estimated two million people in the U.S. now drive for ridesharing companies like Uber or Lyft. It’s a flexible work option that is appealing to many as a side hustle or full-time job, especially since drivers can set their own hours. However, many drivers may not have the right type of insurance coverage to protect them while using their vehicle for work.

“Rideshare drivers often have a gap in their insurance coverage that they may not know about,” said Kevin Quinn, vice president of claims and customer experience at Mercury Insurance. “A driver’s personal auto insurance has them covered while they’re driving for personal use – that is, with the ride-hailing app turned off.

“Companies like Uber or Lyft offer partial insurance to cover the driver and the driver’s vehicle once a fare is accepted and while they transport a passenger. This leaves a gap in between, when a driver has turned on their ride-hailing app to search for a fare, but before they have accepted a trip.”

If a driver is to get into a collision during this period, they may not be covered by either form of insurance, which means they might be on the hook for damage to other vehicles, injuries to other drivers and passengers, as well as damage to their own car and their own medical expenses. Mercury Insurance offers ride-hailing insurance, providing the coverage needed to fill that gap and mitigating risk between fares.

However, ride-hailing insurance only covers a driver for ridesharing work. Depending on the nature of business conducted with your vehicle – like restaurant employees who deliver food or a Postmates driver – a business auto insurance policy may be a better fit. Your personal auto insurance policy won’t cover you if you happen to get into a collision while using your vehicle for work, such as deliveries. Check with your company to see if they offer a special policy to cover delivery drivers.  Businesses such as catering, construction or farming that operate out of trucks, vans or SUVs can benefit from a specifically designed commercial auto insurance policy to get coverage for liability, collision and comprehensive, for example. 

Whatever kind of work you use your vehicle for, it’s important to speak with your insurance agent to ensure that you’re getting the right amount of coverage to help ensure you and your business can operate safely.