Which companies offer rideshare insurance? It’s a question I get from a lot of new drivers who are doing their research, and from existing drivers who realize that there are some potential insurance pitfalls that they should be aware of.
It’s a really important subject, so watch my video and read the video transcript below. Then visit my list of insurance providers to see what’s available in your state.
How insurance works with Uber and Lyft. What’s the problem?
If you’re not familiar with the Uber insurance situation and the same situation for Lyft, basically all you need to know is that while you’re on a trip with Uber or Lyft, you’re covered. You have a million dollars of liability insurance. With Lyft there’s $2,500 collision deductible, which is high. With Uber there’s a 1,000 collision deductible.
Where the problem exists is during period one. Now, period one is when you’re online on the app, but you haven’t accepted a trip yet. When you’re in that period, basically Uber and Lyft are saying, “We’re going to provide much lower liability limits and no collision.” So you can imagine, if you get into an accident during that period, you’re sort of screwed. That’s where rideshare insurance comes in. The other nice thing about rideshare insurance, is that they’re okay with you being a rideshare driver. A lot of personal policies are just not okay with that, so you sort of have to tell this white lie to them. Over the past few years a lot of new companies have started offering rideshare insurance products, but the big problem we’ve seen is, it’s still a state by state matter, so you might have Farmers in one state, but not in a bunch of other states and vice versa.
There are lots of providers…in some states
California, for example, has a lot of options. It has State Farm, Mercury, Farmers, Allstate, USAA, Liberty Mutual, MetLife, which is a bunch of options. And the reason for that is, first of all, there’s a lot of rideshare drivers so all of these companies have determined that hey, we should create a product in this state. And you can imagine it’s a lot of work to create an insurance product for a new state. These companies have all gone and done that because it’s a big market.
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In your state you might notice that you may not have all those options. You may have some, you may have none, and it’s important to just understand that’s why. I actually got quotes from four companies in California, and the cheapest for me was actually Allstate. But it’s important to just consider that the different options and their coverage.
Different company offer different features
Each insurance company actually provides a little bit something different. Allstate, for example, covers period one and they actually have a cool feature, I think it’s called deductible gap coverage. If you get into an accident during period two or three, you can still go through Uber’s insurance and you’ll have to pay that $1,000 deductible, but since you have that deductible gap coverage, if your Allstate deductible is $500, all you have to pay is $500. Allstate will cover the difference. You can imagine with a company, if you’re doing a lot of Lyfts, that might come in handy, because Lyft has a $2,500 collision deductible. If you have a $500 deductible with Allstate, they won’t cover you during periods two or three; you’ll use Lyft’s insurer, but they will cover that difference in deductible, so that’s pretty nice.
State Farm is another good example. They were more expensive when I got the quotes, but they actually cover all three periods. So even if you get into an accident during period one, two, or three, you can actually say, “Hey Uber, I’m not going to use your insurance, I’m going to go with my State Farm guy.” And hopefully your State Farm agent is going to be providing much better service, much better care, probably going after a lot more stuff for you, and just a better level of general service than if you have to go through Uber’s insurance company, James River, which frankly, has had a lot of bad reviews. I’ve had a lot of complaints from drivers that James River is not that responsive. So it makes sense to go with a company like State Farm.
Which company offers the cheapest insurance
You might be wondering, what’s the cheapest? I want to be covered for rideshare insurance, but I want to pay as little as possible.
Unfortunately it does vary. You can imagine it varies based on the state you’re in, which options are available, and of course your driving history. Even the zip code you’re located in might make a big difference. When I lived in Orange County and I moved to Long Beach, my insurance went up by 100 bucks every six months. And I called them and asked, and they said, “It’s just because of the zip code,” so that’s something to keep in mind too.
I talked to a lot of people who are getting ride share insurance, and I’ve heard USAA is a great option if you can get it. They have a good post on the site about USAA rideshare insurance and how to make sure you’re eligible, because obviously, you have to have some family member that served in the military.
There are a few loopholes that you can use to try to get around that, but that’s the big problem with USAA is that eligibility requirement. If you can get it though I’ve heard that drivers are getting great deals. Like 10-12 bucks a month add on, pretty consistent across the board. I’ve also heard really good things about Geico as far as being very cheap or inexpensive, but they tend to be in a lot more mid to east coast markets.
You can buy regular personal insurance in California with Geico but you can’t do rideshare insurance with them yet. Ultimately though, you’ll realize that you really are going to want to get a bunch of different quotes and compare, not only the price, but also the coverage, because that’s sort of what insurance is. You’re preparing for that unknown if you get into an accident.
It’s not enough to just have insurance. You want to have it but also understand benefits, like maybe this company will provide me a rental car, or maybe I have options. And that’s really why the insurance topic is so important, it helps you be prepared. So if you don’t have any options in your state you may want to look at, at least a company like Liberty Mutual. Liberty Mutual is an example of a company where they won’t cover you during period one, but hey, they at least won’t drop you. Because if you’re in one of these states with, let’s say Geico, where they don’t have a rideshare insurance product, and you actually tell them that you’re a rideshare driver, they’re not going to provide you coverage. A company like Liberty Mutual will at least say, “Okay, we’re okay with that. We won’t drop you. You’re just going to have to defer to Uber and Lyft’s policy.”
Hopefully that gives you guys some good background on the different companies that are providing rideshare insurance, and clears a few things up for you. If you have any questions don’t hesitate to reach out. I know it can be a little bit of a confusing topic, but we’ve got lots of great resources. We have a rideshare insurance marketplace on our site where we actually sort all the different options by state, and try to update it on a monthly basis. So if you go straight there you’ll see all the different companies that are available, and we even have recommended agents who we’ve loosely vetted and/or our readers have recommended to us, that hey these guys are super knowledgeable, provide great service. So hopefully you can take advantage of that. If you have any questions don’t hesitate to reach out. Take care!
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