How Much Will My Insurance Go Up if I Drive for Uber?

Rideshare companies like Uber and Lyft provide some insurance coverage to their drivers, but it doesn't pay in every case. Drivers typically need to purchase specialized rideshare insurance from their own insurers to be certain they have enough coverage in case of an accident.

This, of course, means that rideshare drivers pay a little more for their car insurance. How much your car insurance will go up if you drive for Uber or any other rideshare company will vary, but it typically increases by 10% to 20%.

How does rideshare insurance work?

About five years ago, a friend told me about a rideshare gone wrong. Her driver rear-ended a car while looking at the app instead of the road. My friend was OK, but any car accident is scary, and she was worried she'd end up a witness in a legal battle because the other driver's damage was pretty bad.

Ultimately, my friend was spared that hassle as no one disputed who was to blame. Still, it made her wonder if Uber would be responsible for the cost. Since I write about insurance, she asked me, and the answer was more complicated than she expected.

Both Uber and Lyft provide car insurance to drivers, but it only applies in certain circumstances. The companies also require their drivers to personally carry at least the state minimum in property damage and bodily injury liability coverage.

Here's how insurance coverage generally works for both Uber and Lyft drivers, although there are variations in certain states to comply with specific regulations:

	When the app is off	When the app is on and you're waiting for a ride	When the app is on and you're en route or driving passengers
Uber	Personal auto insurance and/or rental coverage	Uber's third-party coverage: $50,000 per person and $100,000 per accident in bodily injury liability $25,000 in property damage liability per accident Potentially uninsured and underinsured motorist coverage, personal injury protection (PIP), and medical payments (MedPay) coverage, depending on state rules	Uber's third-party coverage: At least $1 million in bodily injury and property damage liability Uninsured/underinsured motorist coverage, PIP, and/or MedPay coverage (based on state rules) Comprehensive and collision insurance (with a $2,500 deductible) if you have them on your personal policy Optional injury protection for additional medical expenses (requires a fee) Occupational accident coverage (in California and Massachusetts)
Lyft	Personal auto insurance and/or rental coverage	Lyft's third-party coverage: $50,000 per person in bodily injury liability* $100,000 per accident in bodily injury liability* $25,000 per accident for property damage liability* * Limits vary in Arizona and Nebraska	Lyft's third-party coverage: At least $1 million in liability coverage (in most locations) Necessary first-party coverages such as uninsured/underinsured motorist insurance, MedPay, PIP, and occupational accident coverage Comprehensive and collision coverage (with a $2,500 deductible) if you have them on your personal policy

The insurance that Uber and Lyft provide to drivers is called third-party coverage because a third party (Uber or Lyft) bought the coverage to pay for losses you cause to others or losses you experience yourself while driving for one of these companies.

The coverage that the rideshare companies buy is also primary coverage when it's in effect. That means you don't have to try to make a claim with your own insurance first. If you're en route to pick up a passenger or you're driving one, Uber and Lyft's coverage will be the first resource you turn to if something goes wrong.

Of course, you could still get into a crash when you're in your car and not driving for Uber or Lyft. So, you need your own insurance for those situations.

Plus, depending on the rules where you live, Uber and Lyft coverage may not pay for all your losses, even if you're actively working. You may be on the hook for your own medical payments or uninsured motorist losses, for example.

You don't want to get stuck paying out-of-pocket costs in those situations where Uber and Lyft don't cover you. It's important to have your own policy that includes rideshare coverage.

Why this coverage is important

So, why is special rideshare coverage important, even though Uber and Lyft provide protection most of the time when you drive for them?

It's because your insurer still has a responsibility for some losses, and driving commercially makes those losses more likely. As a result, car insurance companies consider driving professionally as one of the factors affecting car insurance rates.

Because of the added risk, most individual insurance policies exclude coverage when driving for business purposes. You must also tell your insurer if you're driving for a rideshare company. Otherwise, it could deny your claim or cancel your coverage if it discovers what you're doing.

The good news is that many insurers offer ridesharing endorsements or add-ons that give you the extra protection you need as a Lyft or Uber driver. The endorsement fills the potential coverage gaps between the rideshare company's insurance and your personal auto insurance policy, which usually only pay for non-commercial use.

Let's say, for example, that you sign into your Uber app but no one's around right away, so you go to a drive-thru to get some food and unfortunately get into a collision while pulling out of the parking lot. If you didn't have a rideshare endorsement, your insurer might not cover you in this case, and you could be left paying for out-of-pocket expenses.

How much does rideshare insurance cost?

Having a personal auto policy with rideshare insurance costs more than your policy would without the endorsement. In fact, policy premiums are usually around 10% to 20% more.

This is bad news if you're hoping to save money on car insurance. Still, you need this coverage, and it costs more due to the added risk, so you'll just have to shop around carefully to find an insurer that gives you a good deal.

To understand how much more it can cost you, look at the table below comparing the average cost of a full coverage policy with and without a rideshare endorsement. This policy type includes liability coverage and other insurance that protects you from loss, including collision and comprehensive coverage.

Company	Average full coverage premium without rideshare	Average full coverage premium with rideshare
Allstate	$133	$166
American Family	$149	$194
Erie	$117	$116
Farmers	$226	$295
Progressive	$171	$193
Travelers	$190	$241
USAA	$99	$125
Data provided by Insurify

Even though you'll pay higher premiums for such coverage than with a liability-only policy, you'll want it. That way you don't have to pay out of your own funds to repair your car if something happens that's not someone else's fault or you need to replace a stolen or vandalized vehicle.

How to get the right rideshare coverage

The first step for finding the right rideshare coverage is to shop around.

You should find out which company offers the best insurance rates. If you already have auto coverage, you can check with your current company. However, even if it does offer rideshare protection (which not all companies do), some other insurers may be cheaper once you've added in the rideshare protection. That's why it can pay to get several quotes.

In some cases, you'll have to talk with an agent to get rideshare coverage, as you may not be able to buy this kind of policy online. Be sure to look carefully at the coverage you're getting quotes for, though, because you want to compare policies with similar levels of protection. Pay attention to details such as coverage limits and deductibles as well.

FAQs

Should I tell my car insurance about Uber?

You must tell your car insurance company if you're driving for Uber or another rideshare company. Otherwise, it could deny you coverage if you have to file a claim after something happens. It may also cancel your policy or prevent you from renewing it.

Typically, you'll pay around 10% to 20% more if you add rideshare insurance to your auto policy. The extra cost depends on the insurance company, so get quotes from several options.

Can I deduct rideshare insurance on my tax return?

As a rideshare driver, you can deduct eligible business expenses. This can include the business portion of your auto insurance and certain other expenses, such as annual licensing or registration fees, gas, and repairs. Check the IRS rules to learn about your options.

How can I save money on rideshare coverage?

You can save money on rideshare coverage by shopping around to find the best and most affordable insurance companies and by maintaining a safe driving record. You can also take steps to save on your policy overall, such as taking advantage of discounts, bundling home and auto policies, and reassessing coverage limits and deductibles.

Smart Drivers, Smarter Savings

Ohio: Say Goodbye to High Auto Insurance Rates if You Live in These Zip Codes

See if you qualify for a lower rate in less than 2 minutes

Start Saving

By clicking the button above, I understand and agree that this site uses site visit recording technology (provided by Trusted Form, Jornaya, and Microsoft Clarity) Privacy Policy

Bottom line

Whether you're a rideshare driver or a passenger like my friend, the hope is always that no accidents will happen. If they do, though, having the right rideshare insurance in place is crucial to avoid having to pay out of pocket for your own damages or someone else's.

Shop around carefully to make sure you're getting the necessary coverage so you'll have the peace of mind of knowing you're protected if a crash occurs. You can check our list of the best car insurance companies and start requesting quotes.

Save On Your Auto Insurance