What Insurance Will You Need to Drive for Uber?

If you plan to drive for Uber, then you need to review your insurance needs.

Uber does not require drivers to carry additional insurance. In fact, Uber provides insurance to drivers that cover them when waiting for rides, delivering packages, and driving passengers around.

However, because of restrictions with Uber’s in-house insurance, many Uber drivers choose to carry rideshare coverage. Rideshare coverage provides you with additional protections while covering the commercial use of your vehicle.

Keep reading to find out everything you need to know about Uber’s car insurance requirements and how they work.

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How Car Insurance Works for Uber Drivers

If you drive for Uber, then you need a personal auto insurance policy, which legally covers you when driving on public roads.

As soon as you turn on the Uber app, Uber extends their in-house liability insurance coverage to you.

However, Uber’s in-house liability insurance coverage may leave you underinsured or uninsured, and many drivers buy additional rideshare insurance through their ordinary insurer for added protection.

Here are the key points to know when shopping for Uber insurance:

• All Uber drivers need a personal auto insurance policy to legally drive on public roads. This personal auto insurance policy covers you when you’re not driving for Uber.
• A personal auto insurance policy does not cover commercial vehicles. As soon as you start driving for Uber (say, when you turn on the app and make yourself available), you are using your car for commercial purposes. If you are involved in an accident when driving for Uber, then your personal auto insurance company may decline your claim.
• Uber maintains liability insurance for all rideshare drivers. This insurance provides basic coverage when you’re driving for Uber. It covers you whenever the Uber app is turned on and you’re available, including when you’re between rides, driving to a rider, making deliveries for Uber, and driving with passengers in your vehicle.
• Uber’s in-house insurance has various drawbacks. There’s a $2,500 deductible for collision and comprehensive coverage, for example, which means you’ll need to pay Uber $2,500 to repair any damage to your vehicle (or replace your vehicle after a total loss). Uber’s liability limits could also leave you underinsured and expose you to significant risk.

Because of the drawbacks of Uber’s in-house insurance, many Uber drivers buy rideshare insurance through their personal auto insurance company for added protection. Many major insurers, including Allstate, Liberty Mutual, and Progressive, offer rideshare and delivery coverage to expand limits, protect your vehicle, and provide you with effective coverage.

Uber Insurance Requirements

Uber maintains automobile liability insurance on behalf of all rideshare drivers in the United States. This insurance covers you when logged into the Uber app.

As an Uber rideshare driver, you must buy your own auto insurance to meet (or exceed) minimum insurance requirements in your state. All states require a certain minimum amount of car insurance to legally drive.

If you drive a limo or similar vehicle for Uber, then you are responsible for maintaining all licensing and commercial insurance requirements based on state or local law.

How Uber’s In-House Insurance Works

Uber has in-house insurance that extends to all rideshare drivers in the United States. As long as you are logged into the Uber app, you receive some level of insurance coverage.

However, Uber’s in-house insurance varies based on how you’re logged into the app. Because of these coverage changes, you might be underinsured or uninsured in certain situations – even when you think you’re covered.

Here’s how Uber’s in-house insurance works:

When You Are Offline or the Driver App is Off

Your personal auto insurance policy applies.

If you have car insurance with GEICO, State Farm, or any other provider, for example, then your car insurance covers you when you are offline or the Uber Driver app is off – just like it would cover you when driving in ordinary situations.

When You Are Available or Waiting for a Ride Request

When you are available or waiting for a ride request, Uber’s in-house insurance covers you if your personal auto insurance does not apply.

Most personal auto insurance policies do not cover commercial use of your vehicle. Your insurer will consider driving for Uber a commercial use – even if you’re between rides. If you are involved in an accident between rides, then your personal insurance will not cover your claim, and you need to use Uber’s in-house third-party liability insurance.

Uber’s in-house liability insurance provides the following coverage when you are available or waiting for a ride request:

• $50,000 in bodily injury liability coverage per person
• $100,000 in bodily injury liability coverage per accident
• $25,000 in property damage liability coverage per accident

When You Are En Route to Pick Up Riders or During Trips

If you are en route to pick up riders or in the middle of a trip, then Uber extends its highest level of insurance coverage to protect you and your passengers.

Uber’s in-house auto insurance covers all of the following in case of a covered accident:

• $1,000,000 in third-party liability coverage
• Uninsured and underinsured motorist bodily injury liability coverage and/or first-party injury insurance
• Contingent comprehensive and collision coverage (up to the actual cash value of the car with a $2,500 deductible)

How Uber’s Insurance Covers Delivery People

Uber also provides insurance for delivery people working for Uber. If you work for Uber Eats or in a similar delivery role for Uber, for example, then you are covered by Uber’s in-house insurance in different ways.

Uber’s insurance for delivery people excludes accidents occurring in New York State.

Here’s how Uber’s insurance works for delivery people:

When You’re Offline or the Driver App is Off

When you are offline or if your Uber Driver app is off, your personal auto insurance applies.

If you have Progressive, USAA, or a similar personal auto insurance policy, then this policy covers you at this point – just like it would cover you when making a normal trip.

When You’re Available or Waiting for a Delivery Request

If you are between deliveries, waiting for a delivery request, or available to accept a delivery request from the Uber app, then Uber provides you with liability insurance. Uber only extends this coverage if your personal policy does not apply (most personal policies do not cover commercial use of your vehicle, and this is considered commercial use even when not actively delivering).

Uber provides the following insurance when you’re available or waiting for a delivery request:

• $50,000 in bodily injury liability coverage per person
• $100,000 in bodily injury liability coverage per accident
• $25,000 in property damage liability coverage per accident

When You’re En Route to Pick Up Deliveries or in the Middle of a Trip

If you are driving to pick up a delivery, or if you’re in the middle of a trip, then Uber maintains its highest level of insurance coverage to protect you in a covered accident. This insurance coverage includes:

• $1,000,000 in third-party liability coverage
• Contingent comprehensive and collision coverage (covers up to the actual cash value of your car with a $2,500 deductible)

What Does Uber’s Insurance Not Cover? Uber Insurance Downsides

We’ve explained what Uber’s in-house insurance covers. However, Uber’s insurance can leave you underinsured or uninsured in certain situations.

Here are some of the things Uber’s insurance does not cover – and other restrictions you should consider when relying on Uber’s insurance:

No Coverage for Car Maintenance: Uber’s in-house insurance, like ordinary car insurance, is designed to cover unexpected events – like collisions. It does not cover car maintenance or related costs.

High Deductibles: Uber’s in-house insurance has a $2,500 deductible for comprehensive and collision coverage. You must pay $2,500 before making a collision or comprehensive coverage claim with Uber, and Uber covers all remaining costs of repairing or replacing your vehicle.

No Coverage for Rental Cars: Uber’s in-house car insurance does not cover the cost of renting a car. If your vehicle is damaged in an accident and needs repairs, then you may need to pay to rent a vehicle out of pocket.

You Must Carry Full Coverage Car Insurance to Receive Uber’s Full Coverage Car Insurance: Uber provides full coverage car insurance (including liability, collision, and comprehensive coverage), but it only provides this coverage to drivers who have full coverage personal auto insurance policy. If you have a liability-only policy, then Uber will not extend collision and comprehensive coverage to you.

Low Liability Limits: Uber provides high liability limits ($1,000,000) when driving with passengers or a delivery in your vehicle. However, the liability limits are much lower when waiting for rides or between rides ($25,000 to $100,000). These limits may meet liability limits in your state, but they could leave you dangerously underinsured if you injure someone or damage someone’s property.

No Coverage for Accidents in New York State for Delivery People: If you are a delivery person working for Uber in the New York State area, then Uber’s in-house insurance policy can leave you underinsured or uninsured because it does not cover accidents in New York State.

Consider Expanding your Personal Auto Insurance for Added Protection

Many insurance companies offer additional rideshare coverage for added protection. For a few extra dollars per month, you can fill in the gaps left by Uber’s insurance, expand your coverage, and ensure you maintain effective and affordable coverage.

On their official website, Uber suggests drivers expand their personal auto insurance coverage to include rideshare and delivery insurance because it “could help protect you even more” beyond Uber’s in-house insurance.

Here are some things to know when expanding your personal auto insurance policy to cover Uber and similar purposes:

• Allstate, Liberty Mutual, Progressive, and other major insurers all offer rideshare plans specifically for Uber drivers and similar workers
• If you don’t have rideshare insurance, your personal insurance policy will decline any accidents or claims made while driving for Uber because it’s considered commercial use of your vehicle
• Some insurers offer rideshare insurance as an addition to your personal insurance policy, while others require you to buy a separate commercial auto insurance policy
• Rideshare insurance expands liability limits, provides better coverage at all times when driving for Uber, and ensures you and your vehicle stay protected beyond Uber’s in-house insurance limits

Final Word

Uber does not require drivers to carry any insurance beyond their personal auto insurance policy.

When you are driving for Uber, you are covered by Uber’s in-house liability insurance policy. This policy covers you when waiting for rides or deliveries, driving to a rider or delivery location, and carrying passengers or packages to a location.

However, Uber’s in-house insurance has high deductibles, low liability limits, and other restrictions that could leave you uninsured. And, because you’re using your car for commercial purposes, your personal insurer will deny any claims you make when driving for Uber.

For all of these reasons, many Uber drivers choose to buy additional rideshare coverage from their personal insurer for added protection. Although you do not need this coverage to drive for Uber, it can provide you with added protection.

For more information, check Uber’s insurance requirements page here.

This article has been published in accordance with Socialnomics’ disclosure policy.