Rideshare insurance refers to an auto insurance offering specific to drivers operating with Lyft or Uber. It covers the uninsured area between individual auto coverage and that provided by rideshare services. The Insurance Research Council (2021) indicated that 83 percent of personal auto policies exclude coverage in situations of a commercial act like ridesharing. Personal auto insurance covers personal driving. In contrast, commercial insurance is specifically intended to be used on a full-time basis and can be costly. Rideshare insurance provides a halfway point by covering the time between when the rideshare app is turned on, and someone is actually in the vehicle. Standard policies do not cover it when in rideshare work without rideshare insurance.

How Does Rideshare Insurance Work?

Here are the four coverage periods defined by rideshare operations:
  1. Period 0: The app is turned off. Personal auto insurance only is applicable. No rideshare activity is occurring and the rideshare insurance or business coverage does not take effect. Claims made at this stage are subject to terms of personal policy.
  2. Period 1: The app is on and no ride is requested. Rideshare companies provide low liability insurance, typically $50,000 per person. The personal auto policies tend to reject claims in this situation without a rideshare endorsement. There is no collision coverage. 
  3. Period 2: A ride is accepted. The driver is on his way to the pick up place. Liability insurance also goes up, sometimes to one million dollars. Components such as collision and comprehensive can be based on the personal policy of the driver.
  4. Period 3: The passenger is already in the vehicle. Rideshare company insurance becomes fully active and covers you up to $1 million in liability coverage and contingent collision. The coverage stops when the passenger leaves the vehicle and the journey.

What Does Rideshare Insurance Cover?

Here are the five essential coverage types rideshare insurance provides:
  1. Liability Coverage: Liability insurance covers bodily injury and damage to property that you inflict on other people when driving a rideshare. It shields you against lawsuits and liability claims in case you are the cause of the accident.
  2. Collision Coverage: Collision coverage restores your car in case of an accident, fault or no fault. It comes live when your own policy on collision exists. They typically have deductibles, and this policy covers you and your vehicle is ride-sharing.
  3. Comprehensive Coverage: This insurance coverage covers both theft, vandalism, fire, and weather damage. It is applicable when your vehicle is damaged without a crash. This requires having detailed details contained in your personal policy to cover the incidents associated with rideshare.
  4. Uninsured / Underinsured Motorist Coverage: It includes injuries and damages in case you are hit by a motorist that has no insurance or inadequate insurance. This secures you against the loss of money due to such accidents on ridesharing.
  5. Med Pay / PIP: Medical cover or Personal Injury Protection after an accident covers your costs and any other passengers. It is applied without regard to fault and in some cases covers lost wages and rehabilitation benefits.

How to Choose the Right Rideshare Insurance?

Here are five key factors to consider when selecting rideshare insurance:
  1. Compare Premiums & Limits: Compare premiums and coverage limits of insurers. Choose a policy that is affordable yet provides sufficient protection, which includes liability, collision, and comprehensive risks when using rideshare platforms.
  2. Company Requirements Check: Make sure that the policy complies with the rideshare platforms. Uber and Lyft are examples of the companies that have minimum liability coverage and other requirements that keep them out of being disqualified as drivers.
  3. Consider Add-Ons: Consider other coverages such as roadside assistance, rental reimbursement or gap coverage. These extensions boost default cover and increase financial protection.
  4. Review Exclusions: Determine policy exclusions to hinder insurance lapses. There are types of accidents or driving situations not covered by some policies leaving a driver in a vulnerable financial position.
  5. Multi-Policy Discounts: Enquire whether there are discounts on bundling rideshare insurance with home or personal auto policies. Multi-policy bundles decrease total insurance cost and add value.

How to File a Rideshare Insurance Claim?

Here are five essential steps to file a rideshare insurance claim:
  1. Notify Insurer Immediately: Contact your insurer to make a report on the accident. Real-time notification accelerates the masses on claims and satisfies policy requirements. Delays can jeopardize rejection or delays over settlement of claims.
  2. Report the Incident: Obtain detailed evidence such as photos, police reports and rideshare app logs. This makes your claim stronger and confirms the accident facts which prevent disputes during claim evaluation.
  3. Liaise with Rideshare Company: Provide the rideshare platform with correct information about the trip and accident. Their contribution explains liability and assists your insurance and application of proper coverage.
  4. Claims Adjuster Labour: Make time to check up on your car and give all necessary papers. Collaborate with the claims adjuster to give them the needed evidence and information and help the claims to be approved faster.
  5. Receive Settlement: Once confirmed, be paid up to the limit of coverage and deductible of your policy. Settlement takes care of repair expenses, payment of medical bills or other covered damages.

How to Get Rideshare Insurance in Houston?

Rideshare drivers in Houston are required to comply with the requirements of Texas regarding insurance. Personal auto insurance provides insurance to your vehicle when not using the rideshare app, but there must be a minimum liability amount of $30,000 per person, $60,000 caused by an accident, and $25,000 on property damage. The coverage is raised to $50,000 per person and 100,000 per accident when the app is powered on and you are not passing a passenger. In flights with customers, rideshare firms offer up to 1 million of liability covers. Most insurers such as Progressive and State Farm provide rideshare endorsements or specific insurance. Make sure your policy is in line with the state regulations and rules on the platform before you drive.