Looking to earn a little extra money? Have a nice car and want it to pay for itself a little more? Bored at home and want to get out and meet people? These are all reasons people have for driving for Uber. The company has made working on your own schedule easier than ever, but if you do want to drive for the company, does Uber notify your insurance company?
No they don’t. They will check your state’s insurance database to verify you have car insurance but they don’t do anything else.
Insurance is a complicated subject and if you have a specific question about your policy, you should talk to your broker or insurer. As a general rule, personal car insurance will not cover you for carrying paying passengers. You then become a car for hire which is something entirely different than personal use.
Depending on your policy and insurer, you may be able to bolt on a Rideshare feature onto your policy which will cover you. Not all insurers offer this and it isn’t available on all types of car insurance so it’s worth checking out beforehand if you plan to drive for Uber.
Car insurance and Uber
The vast majority of personal car insurance policies will include no coverage for ride sharing. This is usually an addon feature for a few dollars a month. As most drivers don’t drive for a living, there is no reason for insurers to add rideshare features as standard.
Uber covers drivers for certain things but does not replace your own car insurance. Uber covers you for what they call ‘Period 2’ and ‘Period 3’. Period 2 is when you accept a ride request from the Uber app and are driving to the pickup. Period 3 is when the passenger enters your car and the ride begins. As soon as the ride ends and the passenger leaves, yhttps://www.novodasoftware.com/our Uber cover is over.
This is all dependent on your having the Uber app open and running during the entire time you’re working. It seems obvious but if for any reason the app shuts down, your phone runs out of battery, reboots or whatever, your Uber insurance is not active.
On a standard car insurance policy you are not covered for anything other than personal use. As soon as you make yourself available on the Uber app, called Period 1 by Uber, you are not insured by your own insurance or Uber’s cover. During Period 1, you have no collision coverage from Uber. You will have the bare minimum liability coverage but Uber only provides the legal minimum during Period 1.
You need to consider Uber’s high deductibles if you think this offer is generous. There is a $1,000 deductible for any claim on its own cover!
Let’s summarize what insurance Uber offers.
Period 1 – Where you’re available for a ride but don’t yet have one. Uber provides $50,000 or $100,000 for injuries and $25,000 for property damage to others. There is no coverage for your car at this time.
Period 2 – When you have accepted a ride request and are making your way to the pickup. Uber offers $1 million combined for liability, $1 million for injuries caused by uninsured and underinsured motorists and $1,000 deductible for damage to the driver’s vehicle.
Period 3 – During the ride until the passenger exits the vehicle. Same coverage as for Period 2.
Don’t risk it, cover it
Most insurers will have a rideshare policy or bolt on feature for a policy. If you’re planning to drive for Uber, Lyft or anyone, you need to get one of these. You can bolt it onto your existing plan for a few dollars extra a month where possible or you will have to take out a new policy. It is extra expense but much cheaper than what a claim might cost.
I know a couple of Uber drivers and they pay an extra $10 a month each for rideshare with their insurer. This gives them total cover for the entire period they are working and fill in the gaps in Uber’s insurance without the $1,000 deductible. Not all insurance policies will have the feature but if yours does, $10 a month is nothing compared to the cost of putting your car back on the road if you’re involved in a collision during Period 1 or have turned the app off for any reason.
Uber does not inform your insurer that you’re driving for them but you should. There are gaps in Uber’s coverage and that deductible is an insult. For as little as $10 a month you can drive as many times as you like with the peace of mind you’re covered. I think that’s a fair investment.