Chances are, you’ve heard of “on demand” driving or delivery services. There is the type that delivers people from point A to point B like UberX and Lyft, and there is the kind that delivers food and services, like doordash, ubereats, and task rabbit. They all pay you to drive your car, some offering signup bonuses as incentives. You might have even considered signing up to drive for a service to earn some extra money. Something you may not have thought of, are the implications when it comes to your car insurance and who would pay in the event of an accident.

From a business perspective, these ride-share and on-demand driving services are similar to taxi companies in that they do not own or operate the cars, and drivers are not directly employed by them.

What does driving for a ride share company mean for your personal auto insurance?

Your personal auto insurance policy may not provide coverage for you if you drive for a service such as UberX or Lyft. This is because personal car insurance policies have a list of exclusions, and they often include “driving-for-hire.” You should check with your insurance company to confirm whether your policy covers “commercial driving.” If not, you’ll want to consider purchasing supplemental commercial auto insurance.

Uber Provides (Some) Auto Insurance Coverage… When The App Is On

Some of these companies may offer a type of temporary and limited coverage. For example, Uber requires all of their drivers to have and maintain car insurance, and they do provide supplemental insurance coverage, but only while the app is on. When the app is off, the driver is covered by their own personal car insurance.

On the other hand, Lyft and some of the other ride-sharing services point to the $1 million per incident excess liability coverage that certain states require them to carry. The policies are designed to deal with liability claims, which a driver’s insurance typically doesn’t cover, but these policies won’t cover a driver’s car and therefore you must rely on your own personal auto insurance policy.

In the end, if you’re looking to start driving for a company like UberX or Lyft, your best bet is to be upfront with your insurance company about the fact that you’ll be “driving-for-hire”, call Guy Willams to find out if you need supplemental insurance.