What Rideshare Providers Need to Know About Auto Insurance

Ridesharing services are quickly becoming an ideal way to make cash on the side. As long as you meet the requirements for driving, documentation, and screening, you can quite often be up and running in your own side business within days. However, since it’s that quick, it can be easy to forget about those essential side things to tidy up before you hit the road. Automotive insurance is at the top of the list, so what do you need to know about it? 

A Personal Car Insurance Policy Might Not Be Enough

A personal car insurance policy covers your vehicle and you while driving your vehicle for personal use. However, when you’re on the clock and ready to pick up a passenger, you’re technically using your car for business. Your personal policy may no longer be valid, and you may not have coverage if you’re involved in an accident. When you request auto insurance quotes, it’s worth asking as many questions as possible about each insurance company’s terms. 

You Can Add Rideshare Insurance to Your Policy

Even if you believe you’re the safest driver, that doesn’t mean you won’t ever end up in an accident. Fortunately, you can add rideshare insurance to your existing personal car insurance policy to protect yourself while working. This insurance type can often fill the gap between your personal insurance and the insurance policy the company you work for offers if you are involved in an accident while waiting for an assignment. It can also provide deductible gap coverage and potentially reduce out-of-pocket expenses when you are en route to a pick-up or have your customer in the car. 

Transport Network Companies (TNC) Offer Coverage

Rideshare companies like Uber offer commercial coverage to their drivers to provide much-needed peace of mind. This insurance type might differ from what you receive if driving a taxi. There are generally three instances where transport network company insurance applies and doesn’t apply. As a result, it can be worth seeking external coverage rather than relying on TNC insurance alone. 

When the driver app is off, your personal vehicle insurance applies. However, when you are labeled as waiting for a ride request or available, your chosen TNC’s insurance policy may be activated. This policy often covers property damage and bodily injuries per person and per accident. 

If you are on your way to pick up a rider or are taking them to your destination, your TNC’s insurance policy may be activated in this case, as well. You may receive cover for third-party liability, uninsured/underinsured motorist bodily injury, and collision costs up to the car’s cash value.  

Rideshare Insurance Can Save You Money

Even though a TNC can offer their drivers commercial insurance, there’s still the issue of a deductible. For collision and comprehensive coverage, these deductibles on a commercial policy can be upwards of $500 and even up to $2,500. Your side hustle to make extra income may end up costing you in an accident. Rideshare insurance can bridge that gap between your collision coverage deductible and your TNC’s collision coverage deductible. 

Ridesharing can be an excellent way to earn extra income in your spare time. However, before you jump into the driver’s seat, it’s worth being aware of your insurance obligations so you can drive with complete peace of mind.