Why Every Rideshare Driver Needs Rideshare Insurance

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Rideshare insurance: driver showing his phone to his passenger

If you’re looking for a side hustle that offers unmatched flexibility and earning opportunities, few options are more attractive than becoming a rideshare driver. Expected to reach $335 billion in global revenue by 2025, it’s a lucrative employment arrangement for moonlighting or making a living between jobs. Log into the rideshare app, approve a ride request, buckle your seat belt, and off you go. It’s that easy.

But one thing that’s not so easy is figuring out how rideshare insurance works alongside your personal auto policy. Interestingly, it may not cover everything you think. Find out what your rideshare coverage protects, what third-party rideshare insurance is, and why it’s the smart move for Uber and Lyft drivers.

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What is Rideshare Insurance?

Rideshare insurance is a hybrid insurance policy that fills the coverage gap between your personal auto policy and the commercial insurance policy offered by your transportation network company (TNC), i.e., Lyft, Uber, DoorDash, Grubhub, and others.

Personal auto insurance policies generally prohibit using your vehicle for commercial purposes, and TNC-provided insurance only covers specific scenarios. To counteract these caveats, a rideshare insurance policy covers instances where neither your personal policy nor your TNC auto insurance protects you fully — it’s typically a liability-only policy with TNC insurance.

The most common occurrence of a lapse in coverage is when you’re using your vehicle for rideshare but haven’t accepted a ride request. During this time, neither policy will cover you if you’re in an accident, so you’re technically uninsured. Rideshare insurance rectifies this situation by ensuring you’re always protected when driving for a rideshare company.

Do I Need Rideshare Insurance?

Although you could skip rideshare insurance altogether, having it is wise. If something happens that’s not covered on either your personal or commercial car insurance policies, you’re left with the bill. Any damage to your car is your financial responsibility, regardless of whether you have liability coverage, collision coverage, or comprehensive coverage. That means you could end up paying thousands to repair damage to your car or another motorist’s vehicle.

Exacerbating the problem, your personal car insurance policy is unlikely to cover any accident that happens while you’re driving for a TNC. And if they find out that you failed to disclose your side gig, there’s almost zero chance that you’ll be covered.

Available as an add-on to your auto insurance coverage, a rideshare endorsement is a smart move with minimal downside that ensures you always have the coverage you need.

Do Uber or Lyft Provide Rideshare Insurance?

Man using his phone

To cover their drivers as required by law, both Uber and Lyft provide a form of commercial liability insurance. However, it doesn’t cover every possible scenario. Sometimes, your personal auto insurance is in effect. Other times it’s the rideshare company’s insurance, and in some cases, the protection limits and type of insurance change.

To make more sense of the coverage times, look at the insurance offered by both Uber and Lyft.

Uber Insurance Coverage

  • When the Uber app is off: Your personal auto insurance coverage applies, whether you have liability, full coverage, or other insurance products.
  • When the Uber app marks you as available or waiting for a ride request: Uber offers third-party liability if your personal auto insurance doesn’t apply up to the coverage limits of $50,000 in bodily injury per person, $100,000 in bodily injury per accident, and $25,000 in property damage per accident (50/100/25). Note that this is liability only, covering only other motorists — not your car or your own injuries.
  • When the Uber app is on, and you’re picking up a rider or on your way: Uber maintains a $1 million third-party liability policy, uninsured/underinsured motorist bodily injury and/or contingent comprehensive and collision up to the actual cash value of the car. This last coverage includes a $2,500 deductible.

Lyft Insurance Coverage

  • When the Lyft app is off: Your personal auto insurance coverage applies.
  • When the Lyft app is on and you’re waiting for a ride request: Lyft includes third-party liability insurance during this time up to $50,000/person for bodily injury, $100,000/accident for bodily injury, and $25,000/accident for property damage. Again, this is liability only and only covers other motorists — it will not include your personal medical expenses or damage to your vehicle.
  • When the Lyft app is on, and you’re either en route to a pickup or in the middle of a ride: Coverages include $1 million for third-party auto liability and any first-party coverages you have (PIP, MedPay, or uninsured/underinsured motorist coverage). If you have full coverage, collision, or comprehensive coverage, Lyft maintains this coverage up to the car’s value, although you must pay a $2,500 deductible.

Lyft’s insurance coverage is available in all regions of the country except in New York City, where local laws apply.

What About Food Delivery Apps?

The same type of coverage applies if you’re a driver for delivery services such as Uber Eats, Grubhub, Postmates, or Instacart. Your personal-use insurance policy still applies when the delivery app is off, but your rideshare service employer will provide insurance similar to what you would find as an Uber or a Lyft driver.

How Much Does Rideshare Insurance Cost?

Unlike other forms of commercial insurance, rideshare coverage is surprisingly affordable. However, how insurers calculate rideshare insurance and whether it’s a hybrid policy or an add-on can affect your rates. The only way to determine how much a rideshare endorsement will cost is by looking at quotes.

The good news is that rideshare insurance is usually cheap — you should only expect to pay a few bucks extra a month to cover your insurance gap.

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4 Popular Insurance Companies That Offer Rideshare Insurance

Person holding a phone while driving a car

Due to the rising number of rideshare drivers, many national and regional insurance companies now offer rideshare insurance. Each has its own specifications, limits, and pricing, so do a bit of research before you select one.

Note that rideshare insurance isn’t a standalone policy. You’ll need to buy it as an add-on to your existing policy, so consider that when choosing an insurance company.


Allstate is a reputable insurer for rideshare drivers, offering some of the highest-rated coverages for rideshare and delivery drivers. Allstate’s rideshare insurance covers drivers during all driving scenarios and is available in most states.

It also offers rideshare deductible gap coverage. Instead of paying the $2,500 deductible that Lyft and Uber levy, it allows you to pay whatever deductible you chose for your personal policy, potentially saving you thousands.

You must already have a policy through Allstate to get this add-on coverage.


Farmers has you covered if you want to protect yourself during the insurance gaps that occur while waiting for a ride. The company is widely acclaimed for its great customer service and easy claims process, making any incident easy to report. However, you will need to contact a Farmers agent to get a quote, and you must already be a Farmers auto insurance customer.

State Farm

State Farm is another great choice for rideshare insurance, and it’s simple to understand. Rideshare insurance from State Farm extends your personal coverage to all aspects of your rideshare driving, excluding the times when the TNC’s liability coverage protects more adequately — up to $1 million for liability.

Another bonus is that — unlike through the TNC’s insurance — you deal directly with State Farm to streamline the claims process should you need it.


Progressive is another superb option for rideshare drivers, offering personal protection and a rideshare endorsement all under one policy. It fills your coverage gaps while waiting for a fare, allowing you to focus on earning cash.

Another great perk is Progressive’s deductible reimbursement. If you choose a $500 deductible and the rideshare company has a $2,500 deductible, they’ll cut you a check for the difference. Add in a top-rated mobile app and an excellent consumer rating, and Progressive is another attractive choice.

Protect Yourself on Every Ride

As the adage goes, you can’t make money without spending. Fortunately, rideshare insurance is only a couple of bucks a month — making the investment a savvy business move. It’s a low-cost way to ensure you’re protected, adding some peace of mind while you add to your savings.

Like with any insurance product, get insurance quotes to get the best rate for your personal policy. Just ensure your preferred insurer offers rideshare options, so you’re covered no matter what. It’s a five-star approach for a five-star rideshare driver you can’t afford to skip.

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