Why Rideshare Drivers Need Special Insurance
Standard personal auto insurance policies don’t cover commercial activities like ridesharing. Most insurers will deny claims if you’re in an accident while transporting passengers or waiting for ride requests. Rideshare companies provide some coverage, but it has major gaps that leave drivers financially vulnerable.
The 3 Periods of Rideshare Insurance Coverage
- Period 1: App Off – Only your personal insurance applies
- Period 2: App On (Waiting for Ride Request) – Minimal coverage from Uber/Lyft
- Period 3: En Route to Pickup or With Passenger – More robust coverage from Uber/Lyft
Top 5 Insurance Providers for Rideshare Drivers
1. State Farm – Best Overall Coverage
- Pros: Available nationwide, competitive rates, full coverage options
- Cons: Higher premiums in some states
- Best for: Full-time rideshare drivers who want comprehensive protection
2. Progressive – Most Affordable Option
- Pros: Low-cost rideshare endorsements, usage-based discounts
- Cons: Limited agent support in some areas
- Best for: Part-time drivers on a budget
3. Allstate – Best for High-Mileage Drivers
- Pros: Mileage forgiveness programs, accident forgiveness
- Cons: More expensive than competitors
- Best for: Drivers who log heavy miles
4. USAA – Best for Military Members
- Pros: Excellent customer service, military discounts
- Cons: Only available to military families
- Best for: Veterans and active-duty personnel
5. Erie Insurance – Best Regional Option
- Pros: Affordable rates in covered states
- Cons: Only available in 12 states
- Best for: Drivers in Midwest and East Coast states
Key Coverage Options to Consider
- Rideshare Endorsement – Adds commercial coverage to personal policy ($15-$30/month)
- Commercial Policy – Full commercial coverage (more expensive but comprehensive)
- Gap Coverage – Protects during Period 2 when Uber/Lyft coverage is minimal
Cost Comparison Table
| Provider | Average Annual Cost | Rideshare Endorsement | States Available |
|---|---|---|---|
| State Farm | $1,800-$2,400 | Yes | All 50 |
| Progressive | $1,500-$2,100 | Yes | All 50 |
| Allstate | $2,000-$2,800 | Yes | All 50 |
| USAA | $1,400-$2,000 | Yes | All 50 |
| Erie | $1,300-$1,900 | Yes | 12 states |
5 Money-Saving Tips for Rideshare Drivers
- Bundle Policies – Combine auto with renters/home insurance for discounts
- Maintain Good Driving Record – One ticket can increase premiums by 20-30%
- Choose Higher Deductibles – Can lower premiums by 15-20%
- Ask About Usage-Based Discounts – Programs like Progressive’s Snapshot
- Review Coverage Annually – Adjust as your driving patterns change
What Uber and Lyft Provide (And What They Don’t)
Uber’s Insurance Policy
- Period 2: $50,000 liability per accident
- Period 3: $1M liability, comprehensive/collision with $2,500 deductible
Lyft’s Insurance Policy
- Period 2: $50,000 liability per accident
- Period 3: $1M liability, comprehensive/collision with $2,500 deductible
Major Gaps:
- No coverage for damage to your vehicle in Period 2
- High deductibles ($2,500)
- No coverage for personal injuries
Final Recommendation
For most rideshare drivers, State Farm or Progressive offer the best balance of affordability and coverage. Full-time drivers should consider commercial policies, while part-time drivers can often get by with rideshare endorsements.
Remember: Never drive for Uber or Lyft without proper insurance coverage. One accident could lead to tens of thousands in out-of-pocket expenses if you’re underinsured.
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