Insurance can be tricky for people who drive for rideshare services like Lyft and Uber. Do these services cover their drivers with commercial auto insurance? The answer is yes, but only to a point. To explain how commercial auto insurance works for these drivers, let's cover the three stages of a rideshare trip:
- The driver logs into the Uber or Lyft app and waits for a ride request.
- The driver receives the request and drives to the pick-up.
- The driver picks up the passenger and drives them to their destination.
Most rideshare services will provide some coverage during the second stage, full coverage during the third, and none during the first.
That first stage is the tricky part.
Drivers for these services will typically carry a standard personal auto insurance policy. When these apps were still brand new, it was not unheard of for auto insurers to drop your policy when they found out that you were driving for Uber or Lyft. Today, insurers have a better understanding of the "gig economy," but there are still some ambiguities on the subject, and it's not always clear whether that first stage is covered under a personal policy, or if it demands commercial auto protection. The question is whether the accident took place while you were "on the job," or "on the way to work." That question is almost a matter of opinion.
To remove some of the confusion, a number of insurers offer "rideshare insurance" to make sure that there are no insurance gaps along the trip. This extra bit of protection generally comes fairly cheap, raising your monthly payments by relatively little, but potentially saving you from being left without a car or a job because you had an accident on the way to pick a passenger up.
Note that most insurance companies will have to take into consideration the extra time that you spend on the road when calculating your rates. Your car may be classified as a commercial vehicle when they find out that you are driving it for professional reasons.
In any event, honesty is always the best policy when it comes to insurance. Let your insurer know how you're using your vehicle. That way, you won't be treated to any unpleasant surprises when it comes time to file a claim.