What You Need To Know About Special Insurance When Driving For Uber Or Lyft

What You Need To Know About Special Insurance When Driving For Uber Or Lyft

Two of the most popular companies for obtaining on-demand private drivers include Uber and Lyft. These are businesses that have been operating for less than 10 years, but they have been growing exponentially. In the past, upon arriving in a new city, you would have to attract the attention of the taxicab. Realizing the need for more drivers, these businesses started to hire and train drivers that can do this job for less. They even have phone apps that can be installed so that you can schedule a pickup anywhere you happen to be. Currently, they are primarily in the largest cities, numbering over 60 countries with well over 400 cities that they provide their services. If you have thought about becoming a driver for either one of these companies, which can be very lucrative, you will need a new car and also special insurance. Here is an overview of what type of special insurance you may need when you are driving for Uber or Lyft.

Overview Of Uber And Lyft

Commonly referred to as rideshare companies, these are businesses that allow people to schedule a driver to pick them up. They are very similar to taxi services, but they are rapidly becoming the preferable way to get to destinations without a car. Uber got its start back in March 2009 in San Francisco, California. Lyft is a much newer company, getting there start back in 2012, also based out of the bay area. According to reports, these companies generate billions of dollars in revenue. They are known to provide as many as 1 million rides per day. For those that would like to become an employee for either of these companies, you should know that you are responsible for not only obtaining a new vehicle, but also special insurance that caters to this particular type of profession.

What Type Of Insurance Do You Need As A Rideshare Driver?

As with any newer vehicle, you will need to have full coverage that you can obtain from your local car insurance provider. Since you are an independent contractor, these businesses are not technically liable for what occurs after a car accident. Commercial insurance is not needed as you are only giving people rides to the destinations that they request. However, you may also need additional coverage because personal automobile insurance is not going to cover you if you are personally sued by those that you have picked up to provide a ride. Although these businesses do have liability insurance, up to $1 million per passenger, you still may want to consider getting the maximum coverage available from your car insurance provider to ensure that in the event of a lawsuit, your coverage will help you in these situations.

What Insurance Does Uber Or Lyft Provide?

The coverage that is provided by Uber will include liability coverage, for the passengers, of up to $1 million. This coverage also covers injuries and vehicle damage if someone is hit by someone driving a person to their destination. The injuries of the driver, as well as damage to their vehicle, will not be covered under this policy. It is also an intermittent policy, one that only works while there is somebody in the car using their services. That's why it is so important to have the maximum coverage yourself because of this contingent policy. There is also the deductible that must be paid by the driver which can be up to $2500. For the most part, drivers that are providing this service are able to avoid these accidents. It's just a good idea, similar to having car insurance on your personal vehicle, in case there is an incident.

Do You Need Commercial Auto Insurance?

Commercial auto insurance from https://procominsurancecompany.com is often needed by drivers that are delivering goods, equipment, and also people. For example, when you are a bus driver, and you are transporting multiple people to a destination, this is the type of insurance that you need to have. However, for Uber and Lyft, this insurance is not necessary. Part of the reason has to do with the liability coverage that they provide their drivers when they have passengers in the car. It is because of this that your personal car insurance will be enough to satisfy the laws of your particular state. You will have to pay higher premiums than ever before, but this will ensure that you are properly protected as you provide ridesharing for people in your community.

Why Do Rideshare Companies Offer Contingent Collision And Comprehensive Coverage?

The reason that this insurance is contingent has to do with the nature of the business. For example, when you are driving the vehicle that you use for Uber or Lyft, and you do not have a passenger, you are not technically working. However, when you pick someone up, you are effectively working, and that is when there liability insurance will be active. That is one of the main differences between someone who is driving a bus full of passengers and someone who is providing ridesharing. In reality, someone that is driving a bus is not driving a vehicle that they are using for personal reasons. It is technically a vehicle that is designed for providing transportation for passengers. That is why their policies are intermittent, and why it is so necessary to have the maximum coverage for your vehicle, especially when you are driving this vehicle for personal use as well.

Now that you know what type of coverage you should have from if you become an Uber or Lyft driver, you need to consider getting multiple quotes from different auto insurance providers. Simply tell them that you are driving for one of these companies, and they will recommend policies that they have sold before. They understand, more than ever before, the type of coverage that you need to have as an independent contractor for these businesses. Once you have your quotes, and they are providing you with the maximum coverage possible, you will know that you will be fully protected.