Insurance Basics For Rideshare and Delivery Drivers

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It’s a natural reflex to yawn at the mere mention of insurance, but when you’re a gig driver, you need to pay close attention to this important topic. In this post we’ll analyze the insurance situation for gig drivers, and focus on how you can decide what’s best for you.

Here’s what we’ll look at:

  • The basics: minimum coverage for gig drivers
  • What policies such as Uber insurance will, and won’t, do for you
  • Extras or essentials? Additional coverage you can buy
  • Beyond your vehicle: important insurance for gig drivers

The basics: minimum coverage for gig drivers

Insurance requirements are a part of onboarding for virtually every rideshare or delivery service where you are required to use your own vehicle. Without that proof of basic auto coverage, you won’t be accepted onto the gig platforms.

Given that it’s illegal in most places to drive without insurance, even if you’re not on a gig, that’s a no-brainer. But there’s something you might not realize. You will need to notify your insurance carrier that you’re gig driving, and purchase additional coverage.

If you fail to do this, you’re risking a lot. Your primary auto policy probably doesn’t cover you if you’re using your vehicle for commercial purposes, such as gig driving. So if you submit a claim, even if you have an accident while you’re not gig driving, your insurance carrier has the right to reject it.

Although there is an extra expense involved, it’s worth it to get a personal policy that offers additional coverage. In some states you may be required to get a commercial policy, while in others you can add on an endorsement for rideshare or delivery driving, which covers the extra risk you’re taking by using your vehicle for this kind of work.

What policies like Uber/Lyft insurance will do for you

Your rideshare or delivery company will offer you some insurance, it’s true, but it might not be enough to cover the damage to the vehicles involved, or the medical costs you or others who may have incurred injury. You’ll want to double check to see if you need additional insurance while you’re driving for a company like DoorDash, Uber, or Instacart. Read the fine print to get all the details.

A look at Uber’s insurance policy, which is like most other companies, reveals how much and when you’ll be covered as a driver. The amount of coverage varies according to where you are in the ride or delivery process. Uber Eats insurance mirrors the terms for rideshare drivers, apart from accidents involving uninsured or underinsured drivers. Also, Uber’s insurance for delivery drivers doesn’t apply to accidents that occur in New York State. In New York, delivery drivers need to purchase separate policies, as stated in this article from New York Motor Insurance.

In stage 1—offline or driving while the driver app is off—Uber does not cover you. You must rely on your personal vehicle insurance policy.

In stage 2—online waiting for a trip or delivery request—Uber provides third-party liability (for those other than yourself and your car) if your personal insurance doesn’t apply, up to

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

In stage 3—en route to pick up or execute a delivery, or during a rideshare trip—Uber maintains insurance for covered accidents in these amounts:

  • $1,000,000 third-party liability
  • uninsured/underinsured motorist bodily injury and/or first-party injury insurance (rates vary by state)
  • contingent comprehensive and collision, if you hold a personal policy with these features, up to the actual cash value of your car 

Note that if you place a claim through Uber’s policy, the deductible as of March 1, 2022 is $2,500.

You’ll definitely want to consider that Uber’s driver insurance covers third parties, not the drivers (except in California, or if you’re hit by an uninsured or underinsured motorist in any state). It’s possible to purchase a low-cost policy that would cover any personal injury that might occur, but coverage for you is not available without making that purchase.

Read more about Uber’s insurance and options for additional coverage on the Uber website, and keep checking it to stay up to date on emerging developments. There is also a list of insurance providers that offer rideshare and delivery endorsements that will protect you under any set of circumstances.

Extra or essential? Additional coverage you can buy

It’s obvious that getting a commercial policy or an endorsement on your personal auto policy is essential, even though it will cost extra money, but there’s more. Another type of insurance might not seem so important; but when you need it, you could find yourself in big trouble if you don’t have it.

Gap insurance protects you from having to pay off a loan on a car you can no longer drive. When you have an accident and your car is deemed a total loss, the insurance company will pay you for your car according to its age, mileage, and maintenance history. This amount will most likely be less than the total amount you owe on your loan. 

For example, if you purchased a car that was valued at $25,000, and an accident renders it a total loss, you might get paid $15,000, depending on the factors mentioned above. Your insurance company won’t pay that extra $10,000. That’s why gap insurance is essential, not just an extra layer of protection. 

You would purchase gap insurance, normally, at the time you secure your car loan. While you’re adding up all the costs of your car purchase, it might seem like another gimmick the insurance company is trying to sell you, but it’s wise to take them up on their offer. If you don’t have gap insurance now, it might be a good idea to look for a policy that would cover you, just in case.

There are other types of insurance you might want to consider:

  • Collision coverage repairs damage to your own car, if you hit a pole or a mailbox, for instance. This coverage also can be used to pay for damage you incurred if someone else is at fault. Your insurer then chases down the other person’s insurance for reimbursement.
  • Comprehensive coverage covers damage that occurs beyond driving, such as weather, natural disasters, acts of nature, and vehicle theft.
  • Uninsured/underinsured motorist coverage keeps your personal policy strong, providing the same coverage your gig company gives you when you’re actively working on a rideshare trip or delivery. It doesn’t hurt to have this protection on your personal policy for the rest of the time you’re using your vehicle.
  • Rental car reimbursement is very useful if you expect you’ll need to get around while your car is being repaired.
  • Transportation reimbursement pays for the cost of getting you back home or to a place where you can rent a car after an accident.

These extras can be obtained from your insurance carrier, but they still might not fulfill all your needs. You can’t afford to be set back by a breakdown or problems involving your smartphone.

As a driver you should have

  • roadside assistance: towing costs, battery jumps, battery replacements, and tire changes are facts of every driver’s life. Gridwise Benefits provides affordable protection that keeps you covered.
  • cell phone protection: a low-cost policy from Gridwise Benefits shields you from the high costs of repairing or replacing your phone, should it be lost or stolen. Your benefits cover up to three phones, which makes the deal even sweeter.
  • accident medical insurance: offers small amounts of cash to help cover expenses from minor accidents.

Beyond your vehicle: important insurance for gig drivers

Now that you’re savvy about the insurance you need for your vehicle, it’s time to think about what goes on beyond your car. As a gig driver, you don’t get company benefits such as health insurance, and coverage for accidental death and disability.

Gridwise Benefits is designed to cater to the needs of gig drivers. Once you’ve downloaded Gridwise and signed up for Gridwise Dollar Benefits, you can get essential benefits for $1/week AND $5k of insurance at no additional cost to you:

Choose from the Gridwise Dollar Benefits menu and purchase only the policies you need. Signing up is easy! Download the Gridwise app, go to the Benefits tab, and tap on any of the policies with a dollar sign icon. You’ll be able to start your coverage right away.

Whether you just need the basics, or want some bells and whistles, Gridwise Dollar Benefits provides coverage that keeps you and your family protected, safe, and healthy.

Get the coverage you need with Gridwise

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