Driving for a ridesharing app is a reliable side hustle. Thousands of Americans earn extra income driving for Uber, Lyft, and smaller ridesharing apps.
Many users assume that their app’s rideshare insurance policy protects them from the moment they log into the app at the start of a shift until they’ve dropped off their last passenger for the day.
But that’s not quite right. Those policies have significant exceptions that leave ridesharing drivers financially and legally exposed at times.
Fortunately, many private insurance companies offer flexible, reasonably priced auto insurance coverage for people who drive for ridesharing apps. These rideshare insurance companies may also provide coverage for drivers on food delivery apps like Doordash and GrubHub.
Why You Need Rideshare Insurance
When you drive for transportation network companies (TNCs) like Uber or Lyft, you’re not just liable for your own actions on the road. You’re also responsible for the well-being of your passengers.
And, although rideshare companies that are loath to treat their drivers as employees might not frame it this way, you’re in effect acting as their representative on the road, with all the legal liability that role entails.
There are several good reasons to take out an auto insurance policy that explicitly provides rideshare coverage.
Note that private rideshare insurance, which some insurers refer to as a rideshare endorsement or personal policy extension, is not the same as commercial vehicle insurance. Neither Uber nor Lyft requires drivers to carry commercial insurance, a more expensive type of coverage than a personal auto insurance policy.
Smaller ridesharing apps and some other delivery apps may require commercial insurance, however. If you’re unsure about a particular app’s coverage requirements, check with them before applying to work as a driver or courier.
Additionally, some of the ridesharing insurance policies on this list may not be available everywhere. Although rideshare insurance availability is steadily increasing across the U.S., there’s still a chance you’ll find yourself in a state without good options. If that’s the case, you may need to look to commercial vehicle insurance as an alternative.
Here’s why it’s a good idea to carry private rideshare insurance:
1. Auto Insurers Often Don’t Cover Rideshare Drivers on Regular Car Insurance Policies
Although the rules vary by state, ridesharing drivers should not expect their regular car insurance policies to cover them while logged into a ridesharing app.
In fact, in some jurisdictions, it’s perfectly legal for car insurance companies to drop policyholders who drive for ridesharing apps if they choose not to add rideshare coverage.
2. Standard Rideshare Company Insurance Doesn’t Cover Drivers in All Situations
Uber and Lyft both offer basic insurance coverage for drivers actively engaged in ridesharing activity. In plain English, this means drivers carrying or en route to pick up passengers.
With the possible exception of bare-bones liability coverage where required by law, a driver waiting for their next ride isn’t covered by Uber or Lyft insurance, even if they’re actively driving to a busier part of town to increase their chances of snagging a fare.
If they’re involved in an accident during this period of downtime, they (or their primary insurer) are liable for resultant injuries and property damage.
3. Standard Rideshare Coverage May Have a High Deductible
Standard rideshare coverage provides liability coverage, under/uninsured motorist coverage, and high-deductible collision and comprehensive coverage.
The first two coverages are welcome (and generous, at $1 million each), but the third is not ideal for drivers who can’t afford to pay $1,000 or more out of pocket in the event of a claim.
Private rideshare insurance provides a sort of gap coverage for drivers who prefer lower deductibles than the apps provide and who want the peace of mind that comes with full coverage while waiting for fares.
Best Car Insurance Companies for Rideshare Drivers
As you might expect, many car insurance companies appear below and on our general list of the best auto insurance companies for U.S. drivers. When available, each listing includes two key measures of company quality:
- The A.M. Best Financial Strength Rating, a measurement of how likely the company is to make good on claims
- The J.D. Power Overall Satisfaction Rating, a customer satisfaction metric that captures policyholder sentiment
As always, don’t jump on the first offer of rideshare insurance coverage you receive. Once you’ve read through this list, head over to Insure.com to dive deeper on the best rideshare insurance companies and get accurate quotes for coverage that fits your side hustle.
1. Progressive
- A.M. Best Financial Strength Rating: A+ (Superior)
- J.D. Power Overall Satisfaction Rating: 3 out of 5 (About Average)
- Great For: Competitive pricing; lots of optional policy add-ons, including rental car reimbursement
Progressive’s rideshare insurance option is a policy extension that attaches to your regular personal insurance policy and provides as much — or as little, down to state-mandated minimums — coverage as you’d like while you’re waiting for a fare.
Progressive’s policy also reimburses the difference between your personal policy deductible and your TNC’s insurance deductible. For example, if your TNC deductible is $1,000 and your Progressive deductible is $500, Progressive kicks in $500 extra when you file a claim under your TNC’s policy.
Where allowed by state law, Progressive’s rideshare insurance coverage extends to drivers working for goods and food delivery apps like Doordash and Postmates as well. Coverage types, limits, and deductibles are the same across the board.
Progressive rideshare coverage is available in most states. Choose from a full range of standard and optional insurance coverages, including collision and comprehensive, as well as optional add-ons like roadside assistance and rental car reimbursement for an additional fee.
2. Geico
- A.M. Best Financial Strength Rating: A++ (Superior)
- J.D. Power Overall Satisfaction Rating: 3 out of 5 (About Average)
- Great For: Low deductibles; special benefits for Lyft drivers
Geico’s rideshare insurance policy is a particularly good value for Lyft drivers, who enjoy special benefits like:
- A $0.25 bonus on every completed Lyft ride, up to $500 extra every six months
- Deductibles as low as $250, 10 times lower than Lyft’s standard $2,500 deductible for in-house coverage
Geico’s rideshare coverage replaces personal auto coverage on any vehicle marked for ridesharing use. If you insure multiple vehicles in your household with Geico but only use one for ridesharing, you’ll need to remove the rideshare vehicle from your personal policy and apply for a rideshare insurance plan for that vehicle only.
Coverage is available in most states. Geico provides coverage at all points during the rideshare cycle, including for drivers waiting on the next fare. And the same policy covers other light commercial uses, such as food delivery and courier service.
3. Allstate
- A.M. Best Financial Strength Rating: A+ (Superior)
- J.D. Power Overall Satisfaction Rating: 3 out of 5 (About Average)
- Great For: Seamless ridesharing endorsement process; deep bench of local agents with local market knowledge
Allstate offers two insurance coverage options for ridesharing drivers: a ridesharing endorsement known as Ride for Hire and a hybrid personal-commercial policy that replaces personal coverage and applies to riders and drivers in covered vehicles.
Ride for Hire coverage attaches to your personal policy and fills the two most costly gaps in TNC coverage: lack of full coverage while waiting for fares and the difference between TNC and personal policy deductibles.
It’s available in almost all states, although pricing and coverage varies according to state law (that is, whether TNCs provide any coverage for waiting drivers) and factors like policy deductibles and vehicle replacement value.
Offered in partnership with Uber, Allstate’s hybrid personal-commercial coverage is available in about a dozen states, including Illinois, New Jersey, and New York. It’s designed as a replacement for the driver’s personal policy and Uber’s TNC policy (when it would normally apply).
Allstate’s local agent network is an advantage for vehicular entrepreneurs with more complex insurance needs, as well as side hustlers who prefer to put a friendly face to their insurance provider.
4. State Farm
- A.M. Best Financial Strength Rating: A++ (Superior)
- J.D. Power Overall Satisfaction Rating: 3 out of 5 (About Average)
- Great For: Seamless personal policy add-on; strong local agent relationships
State Farm offers ridesharing insurance as an add-on to existing personal car insurance policies. The add-on extends State Farm’s medical liability coverage to cover rideshare drivers and passengers whenever the policyholder is logged into the TNC app.
State Farm ridesharing coverage also extends two add-ons that State Farm policyholders love — roadside assistance and rental car reimbursement — to cover ridesharing activities in addition to personal vehicle use.
And it covers the deductible gap between TNC insurance (with deductibles ranging from $1,000 to $2,500, depending on the TNC) and the policyholder’s personal State Farm policy.
Finally, State Farm ridesharing policy acts as the policyholder’s primary coverage at all times during the TNC cycle, even when they’re carrying passengers or en route to a pick-up. As a policyholder, you won’t have to engage with your TNC’s claims department at all — State Farm handles everything on your behalf.
Like Allstate, State Farm has a deep local agent network that’s sure to appeal to ridesharing drivers who value personal relationships or who have complex insurance needs best discussed with human experts. And the company’s impeccable financial strength rating all but guaranteed it’ll be around to make good on claims.
5. Farmers Insurance
- A.M. Best Financial Strength Rating: A- (Excellent)
- J.D. Power Overall Satisfaction Rating: 2 out of 5 (Below Average)
- Great For: Flexible coverage options (including a hybrid commercial insurance policy); extensive local agent network
Farmers Insurance offers two options for rideshare drivers seeking coverage on and off the clock: an add-on to an existing personal policy and a hybrid commercial insurance policy that may be a better fit for full-time drivers and those who use an insured vehicle exclusively for ridesharing.
Unlike some insurers’ add-ons, Farmers’ applies only to the waiting (available) and post drop-off periods. During these phases, it provides coverage under the policyholder’s personal policy, subject to that policy’s coverages, exclusions, and deductibles. While the policyholder has a passenger or is en route to a pick-up, the TNC’s insurance coverage applies.
Like Allstate’s hybrid option, Farmers’ hybrid commercial insurance policy replaces the policyholder’s prior personal coverage and applies throughout the TNC cycle. Like Allstate’s, it’s offered in partnership with Uber and limited to that app. It’s available in more than a dozen states, including New York, New Jersey, and Illinois.
Like State Farm and Allstate, Farmers has an extensive local agent network. If you have complex insurance needs or plan to bundle multiple policy types together (such as auto and homeowners’ insurance), find a local agent and ask what sort of discounts you qualify for.
6. Erie Insurance
- A.M. Best Financial Strength Rating: A+ (Superior)
- J.D. Power Overall Satisfaction Rating: 5 out of 5 (Among the Best)
- Great For: Reasonable pricing on personal policy extensions
Erie offers ridesharing insurance through a “business use” clause that’s easy to add to any personal auto insurance policy. This clause is much more open-ended than most competing insurers’ ridesharing coverage extensions. Essentially, it allows you to use your car for a wide range of legal business uses, including food delivery, courier services, and other applications.
Erie’s business use coverage provides the same level of protection throughout the entire TNC cycle: when you’re waiting for a fare, when you’re en route to pick up a passenger, while you have a passenger in the vehicle, and after you’ve made a dropoff.
It covers any gaps in your TNC app’s coverage and maintains the same personal coverage limits after you log out of the app, eliminating confusion about when and for how much you’re covered.
Erie’s rideshare insurance does come with a catch: Like other Erie policies, it’s only available through Erie’s agent network. If you prefer dealing with humans anyway, this might be a selling point, but it’s worth mentioning upfront that you can’t buy Erie rideshare coverage online.
7. Mercury
- A.M. Best Financial Strength Rating: A (Excellent)
- J.D. Power Overall Satisfaction Rating: Not rated
- Great For: Very reasonable pricing on personal policy extensions
Mercury Insurance provides deductible gap coverage and full TNC cycle coverage as an add-on to rideshare drivers’ personal policies.
Although actual cost varies by location, vehicle value, and other factors, Mercury advertises add-ons that cost as little as $0.90 per day, or less than $10 per month. There’s no minimum coverage amount required by Mercury, which is a plus for budget-conscious drivers who don’t want to add more protection than they can afford.
Mercury’s reasonably priced rideshare add-on does have a disadvantage that prevents it from ranking higher on this list: It’s only available in a handful of states, albeit with some big ones (California, Texas, Illinois) in the mix.
8. American Family Insurance
- A.M. Best Financial Strength Rating: A (Excellent)
- J.D. Power Overall Satisfaction Rating: 3 out of 5 (About Average)
- Great For: Reasonably priced policy extensions; extensive local agent network
American Family Insurance offers a rideshare endorsement on any personal auto insurance policy. This endorsement provides the same level of coverage as the existing personal policy throughout the TNC cycle, including during waiting and post-dropoff periods. It’s available in about 15 states, including Georgia, Illinois, and Washington state.
American Family Insurance doesn’t provide deductible gap coverage for claims incurred while drivers have passengers in the vehicles or are en route to pick up passengers. This omission is a partial explanation for the company’s extremely low rideshare coverage rates, which start at just a few dollars per month for basic coverage.
Final Word
Driving for a TNC is a flexible side hustle with real extra income potential. However, because it usually involves using a personal asset (your car) for business purposes, it’s not entirely without risk.
Neither can income earned driving for Uber or Lyft fairly be described as pure profit. Rideshare insurance is just one of several overhead costs for gig drivers, along with fuel and vehicle maintenance.
These car insurance companies don’t give away coverage for free, but they do make peace of mind a bit easier to bear, financially speaking. Just remember to use an auto insurance quote aggregator to compare multiple offers of coverage.
