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What kind of car insurance do I need for Uber?

Uber turned the private transportation industry upside down when it introduced its modern ride-share program. Commuters no longer have to choose between hailing a cab or sharing a ride with others on the subway or bus. Uber opened the door for everyday people to offer rides to others in their private vehicles, allowing drivers to earn money and commuters to secure more convenient travel options. It’s much faster to have a personal driver pick you up and take you directly to your destination than to have a public bus take you close to that destination with many other stops along the route.

If you’re considering a career behind the wheel or just want to earn some easy money on the side, Uber and similar services like Lyft are probably attractive. Once you are added as a driver, you simply sign into the Uber mobile app and wait for someone to request your services. Once a ride is assigned to your vehicle, you pick up your passenger and take them to a predetermined destination. Payment is handled through the app, so you don’t have to collect money personally.

The problem with this type of driving job comes down to liability. Passengers climb into your vehicle trusting that you have the proper training to safely drive them to their destination, and they assume that you are adequately covered by insurance just in case an accident does occur. Start comparing car insurance rates now by using our FREE tool below! This is where great controversy has erupted since Uber was first introduced, so you have to know what your insurance responsibilities are before you sign on as a driver.

Are You Covered Now?

You may feel like you’re in one of those “Can you hear me now?” cell phone commercials when you start driving for Uber. The difference is that you’ll find yourself asking, “Will you cover me now?” It all comes down to what is now known as the Uber insurance gap, but it’s not as confusing as it sounds once you learn the rules.

Driving with the Uber App Off

When you’re driving for personal purposes and the Uber app is off, you are covered by your personal auto insurance policy. If you’re in an accident at this time, it has nothing to do with Uber since you aren’t servicing a client through their service at the moment. It’s important to keep the app turned off because your personal insurance can refuse to cover the damages if you’re in an accident while it’s turned on.

Driving with an Uber Customer on Board

Once you receive a ride request from Uber and are on your way to pick up your passenger, you’re covered by Uber’s million-dollar commercial insurance policy. It’s important to remain signed into the Uber app from the moment you receive the job to the moment your customer leaves your vehicle because your personal insurance probably won’t cover medical expenses or property damages sustained during the course of an Uber transaction.

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Driving in the Gap

The gap occurs when you have the Uber app open but you don’t have an assignment. Since you aren’t actively servicing an Uber customer, the ride-share company originally didn’t cover any damages sustained in an accident during this period. Insurance companies also denied responsibility for damages sustained during this period because drivers are considered on Uber’s time once the app is turned on.

Private insurance companies now have the option to offer special policies that cover this unprotected gap for all drivers working for ride-share services. Uber has attempted to close the gap by adding contingent liability coverage for all drivers, but there is debate in the industry over the effectiveness of those policies. If you want to drive for the company, you’re always safer if you find an insurance company willing to offer a policy that includes protection while you await a ride assignment.

Do You Need a New Personal Policy?

If you already have personal auto insurance, the first thing you need to do is check your policy’s list of exclusions. Every policy includes a section that details scenarios and circumstances under which the insurance company can refuse to cover damages.

If you go through your policy and see that the company can refuse to cover commercial drivers or drivers operating their vehicle for pay, then you may need to compare quotes from companies offering policies to ride-share drivers.

If you’re in doubt about the wording in your policy, call your insurance company and ask if your policy is valid once you sign on as an Uber driver. If you have an insurance agent, they are an excellent resource for insight into the details of your policy, and they can suggest alternative policies that their insurance company is now offering. You still want to jump online real quick and compare the rates offered for the new policy to other companies currently covering Uber drivers.

Other Requirements for Uber Drivers

You have more to worry about when driving for Uber than your insurance policy. Every state sets their own rules regarding the licenses ride-share drivers must carry, and some even require special vehicle registration for drivers. Some states group Uber drivers in with all commercial drivers and require them to obtain commercial driver’s licenses. Other states only require those working for ride-share services full time to obtain a commercial license.

For instance, Uber drivers in New York City are required to secure a TLC driver’s license and TLC license plate. The license declares them a “for hire vehicle driver,” and the license plate registers their car as a commercial vehicle. You have to research the laws for your state and make sure you comply not only in terms of insurance but with your license and vehicle registration as well.

New Options on the Horizon

While some insurance companies are canceling personal policies covering Uber drivers, there are many others jumping into the market eager to help drivers. This includes some new companies with creative ideas for personal and commercial insurance coverage. Uber has changed the way commuters think about traveling from point A to point B, and it takes time for an entire industry to catch up with modern trends. New insurance options will continue to surface as ride-share programs continue to thrive, and your coverage responsibilities will become less confusing with time. Start comparing car insurance rates now by entering your zip code in our FREE tool below so that each time that your personal insurance policy comes up for renewal, you don’t miss out on some of the best new options.

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