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Driving for Uber: Insurance Guide

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Thinking about driving for Uber? On the surface, it makes sense — all you need to be a driver for the basic UberX service is a car that’s not ancient (newer than 2001, in most places), a driver’s license and registration, a clean driving record and a background check.

Oh, and you need one more thing: car insurance. And when you’re driving for Uber, insurance can get complicated. Here’s what you need to know.

Uber Insurance for Drivers

Here’s the 15-second guide to driving for Uber: You register as a driver and get an app on your phone. When you turn on the app to signal you’re available, you get pinged when someone in your area requests a ride. The app guides you to pick up the customer and take them to their destination. You get paid through the app — the rate depends on your city and whether it’s a high-demand period — and Uber takes 20 percent.

The appeal of driving for Uber is the flexibility. You can drive on your schedule, as many or as few hours as you’d like. Some drivers only work during high-demand “surge pricing” hours, such as Saturday nights, to maximize their earnings.

But how does car insurance fit into this on-and-off driving schedule? It gets a little tricky. As a driver, you’re covered by the Uber insurance policy when you’re driving passengers around. It’s a hefty policy, with up to $1 million in liability, up to $1 million in uninsured/underinsured motorist injury. This Uber insurance policy is primary insurance, which means it takes effect before your personal insurance does.

Uber also offers contingent collision and comprehensive up to the actual cash value of your car, after a $1,000 deductible, but it only kicks in if your personal collision policy declines to pay.

One more thing to know: Uber insurance policies vary by state. Find out what’s covered in your state.

Personal Insurance For Uber Drivers

uber insuranceSo if you get into an accident during an Uber ride and one of your passengers is injured, or if an uninsured motorist hits you and hurts you or your passengers, you should be covered by Uber insurance. But what about when you’re not driving a customer?

There’s a gray area when an Uber driver has turned on the app but has not yet responded to a call. Technically, the driver’s on the clock — but which insurance is covering him or her?

The Uber insurance policy does offer coverage when a driver’s between trips. It includes liability for bodily injury up to $50,000 per individual per accident, up to a total of $100,000 per accident, as well as up to $25,000 for property damage. But — and this is a big “but” — this policy is contingent to a driver’s personal insurance policy, meaning it will only pay if your personal auto insurance won’t pay anything. So between trips and during normal, non-Uber use of your car, you’ll need a robust personal car insurance policy.

Uber Insurance: Which Companies Offer It?

Don’t assume your auto insurance company will be cool with you driving for Uber. If you’re making money by driving, that could require a (more expensive) commercial auto insurance policy. And if you “forget” to tell your insurance company that you’re an Uber driver, your accident claim might get denied.

Here’s a small sampling of companies offering Uber insurance.

  • Metromile offers auto insurance specifically for Uber drivers. Their policies ensure coverage during off-the-clock hours as well as during periods when they’re waiting for passengers. Metromile also adapts its innovative pay-per-mile model for Uber drivers. You pay 5 cents per mile for personal travel or waiting periods (on top of the $40 per month base rate), and pay nothing while you’re driving Uber passengers. The only catch: as of February 2016, Metromile is available only for Uber drivers in California, Illinois and Washington.
  • Mercury Insurance announced it would begin offering insurance for Uber drivers and other rideshare drivers in California, starting in 2016. Like Metromile, Mercury extends your personal insurance coverage to cover the period when the Uber app’s on but a driver hasn’t yet accepted a ride/picked up a passenger.
  • Farmers Insurance offers rideshare insurance in 16 states, as of February 2016.

Other major insurers, like Geico and Progressive, are beginning to roll out Uber-friendly policies. The Rideshare Guy blog has a rundown of Uber insurance options in various states.

Drive safe!

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Based on a survey of 100 California Residents. Average savings determined via a comparison of their selected policy against their self-reported annual premium.