Ride Share: Does Using Uber Affect Your Auto Insurance?

Personal auto insurance policies were not designed with ride sharing in mind. Due to this, your insurance might not cover you the way you think if an accident occurs. Many traditional policies don’t cover these types of accidents, so before you pick up your first passenger, learn how driving for a ride share service could affect your insurance.

While some ride share companies provide limited coverage, it depends on the various phases you are in when the accident occurs.

There are 3 phases you go through if you drive for a ride share app:

Phase 1: Looking for a passenger

This period spans when you are logged into the app and are looking for a passenger. It starts as soon as the app is turned on, until you pick up a passenger. During this time, your personal auto insurance may no longer provide coverage. Most policies include an exclusion that restricts coverage for “driving for hire”. This means if you are found to be at fault and are sued, your future earnings and assets can be at risk if damages exceed limits typically provided by the ride share company. The company usually provides some coverage (limited liability) if you cause damage to someone else’s property or cause them injury if you are at fault for an accident in this phase. Damages to your vehicle or injuries to you may not be covered without having additional coverage.

In phase one, if you are at fault for an accident, your vehicle is damaged due to weather, such as hail, or you collide with something other than a vehicle (ie. an animal or a guard rail) you may be paying for damages out of your own pocket.

If you are hit by an uninsured/underinsured motorist, you may have to pay for the loss; unless the ride sharing company is required by the state to provide coverage (higher limits may be needed).

Phase 2: Picking up a rider

This phase starts once you accept a passenger and are on route to pick them up.

Phase 3: Driving your passenger to their destination

This phase begins after the passenger has entered your vehicle and does not end until they are dropped off.

In phases 2 & 3, the ride sharing company typically offers commercial auto liability coverage of $1 Million, but it is important to check with your ride sharing company. Collision and comprehensive coverage is a bit more complex. Uber (and some others) offer collision and comprehensive coverage during phase 2 & 3, but this is contingent coverage in most states. That means you must file a claim with your insurer first. If they deny your claim, Uber’s insurance will step in.

While companies like Uber require drivers to have insurance, ensure that ride sharing doesn’t void your coverage, before you start.

Just call us at 724-929-2300 to review your current auto insurance policy and to find your best options. Let us do the comparing for you. We’ll save you time and get you the right policy at the best price!

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