ClickCease If I Drive for Uber or Lyft, Does My Insurance Go Up?

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Rideshare Insurance Coverage

Does Rideshare Insurance Cover Uber and Lyft Drivers?

During 2014, Uber expanded from 66 cities in the United States to 266 other cities around the world. In New York, there are more than 80,000 people who drive for Uber, Lyft, Gett, and Via. In California, Lyft has more than 325,000 drivers, while Uber has at least 200,000 drivers. California law states that drivers for transportation network companies (TNCs), like Uber and Lyft, must be covered by car insurance. When the rideshare app is off, the driver’s personal auto insurance is in play. When the rideshare app is on, the driver is on the clock for Uber or Lyft. During this time, these ridesharing companies will provide insurance coverage for their drivers.

Last year, Assembly Bill 5 (AB5) was passed because of the way rideshare and gig companies used independent contractors to do the work of employees. According to the bill, ridesharing companies are supposed to hire workers to be their employees and not independent contractors. Uber and Lyft lobbied aggressively to be exempt from the law, but they are still required to follow it. Because of the law, gig workers now have a right to labor protection and benefits, such as paid parental leave, unemployment insurance, and overtime pay.

Uber and Lyft Insurance Policies

Uber and Lyft provide ridesharing insurance to rideshare drivers who are involved in an accident. Their insurance policies are divided into four different periods.

  • Period 0. The Uber driver is offline. Any accident must be covered by the driver’s personal insurance, which must meet the minimum automobile insurance requirements in California. You must have at least $15,000 in bodily injury coverage for each person who is injured in an accident, $30,000 of bodily injury coverage per accident, and $5,000 for property damage coverage.
  • Period 1: The driver is online, but they have not been matched with a rider yet. If the driver gets involved in an accident, Uber and Lyft will offer a third party liability if your personal auto insurance doesn’t apply. Insurance coverage includes $50,000 of bodily injury liability coverage per person, $100,000 of bodily injury liability coverage, and $30,000 of property damage liability.
  • Period 2: The driver accepted the request and was on their way to pick up the rider. Under this circumstance, the driver will receive coverage by Uber or Lyft for an accident. Coverage includes $1,000,000 third party liability, uninsured/underinsured motorist bodily injury, contingent comprehensive collision, and up to the actual cash value of the car ($2,500 deductible).
  • Period 3: The driver picked up the rider and was on the way to the rider’s selected destination. If the driver is involved in an accident during this process, Uber or Lyft will cover for damages, which include $1,000,000 third party liability, uninsured/underinsured motorist bodily injury, contingent comprehensive collision, and up to the actual cash value of the car ($2,500 deductible).

Pedestrian Deaths in Los Angeles

Will My Insurance Go Up if I Drive With Uber or Lyft?

During 2014, Uber expanded from 66 cities in the United States to 266 other cities around the world. In New York, there are more than 80,000 people who drive for Uber, Lyft, Gett, and Via. In California, Lyft has more than 325,000 drivers, while Uber has at least 200,000 drivers. California law states that drivers for transportation network companies (TNCs), like Uber and Lyft, must be covered by car insurance. When the rideshare app is off, the driver’s personal auto insurance is in play. When the rideshare app is on, the driver is on the clock for Uber or Lyft. During this time, these ridesharing companies will provide insurance coverage for their drivers.

Last year, Assembly Bill 5 (AB5) was passed because of the way rideshare and gig companies used independent contractors to do the work of employees. According to the bill, ridesharing companies are supposed to hire workers to be their employees and not independent contractors. Uber and Lyft lobbied aggressively to be exempt from the law, but they are still required to follow it. Because of the law, gig workers now have a right to labor protection and benefits, such as paid parental leave, unemployment insurance, and overtime pay.

If you become an Uber or Lyft driver, your insurance will go up, which is why you need to tell your insurance provider that you are working for a ridesharing company. If you do not inform your insurance provider, they may not cover your damages or other costs if you were to get into an accident.

Once you tell your insurance provider that you are working for a ridesharing company, they will most likely increase your premium. This is primarily due to the lengthy and frequent drives you will be taking to pick up and drop off riders. Since a rideshare driver is on the road for a long period of time, it is more likely for them to get into an accident compared to a regular car driver. Car accidents cost insurance companies money, which is why they pass this cost onto drivers through higher premiums.

Other than your insurance costs going up, driving for a ridesharing company will have  you switch insurance providers completely. The insurance industry has been fairly slow about adjusting to a rideshare driver’s needs. Instead of creating options for Uber and Lyft drivers, some insurance companies refuse to offer them coverage. A number of insurance carriers will not let you be insured with them if you are using your car for ridesharing purposes. Even though your insurance carrier may not actually allow ridesharing coverage, you need to inform them about your job anyway.

When you update your insurance plan, you should carefully read through the policy. There may be a gap in coverage when it comes to your car’s physical damage in an accident. Any coverage gaps could leave you paying for a bunch of out-of-pocket expenses if an accident occurs. While a coverage gap may be acceptable to you, you need to know whether it exists or not so that you can make an informed decision.

Contact West Coast Trial Lawyers Today 

If you have sustained injuries in the city of Los Angeles as a result of a rideshare accident, our experienced team of Uber and Lyft accident attorneys at West Coast Trial Lawyers can help you recover compensation for the losses you have suffered, including medical bills, property damage, lost wages, and pain and suffering. Call us today at (888) 341-9802 or email [email protected] to schedule a free consultation with our knowledgeable, caring, and compassionate legal team.

CONTACT WEST COAST TRIAL LAWYERS TODAY


If you have been injured in an accident, you can count on the legal team at West Coast Trial Lawyers to fight for your rights every step of the way. Contact us today to schedule your free case evaluation with a personal injury attorney.
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