Carpooling has changed the way people get around cities. With cheaper tariffs and easier access to vehicles than traditional taxi services, these apps have carved out a significant place in the market. They don’t just take business with taxis, however. They also address groups who would have previously taken public transport or driven themselves.
The rise of leading ride-sharing services like Lyft and Uber has also opened up new job opportunities for many people. Whether they want to work full time or make some extra money on the side, many people are looking for these opportunities.
If you are interested in becoming a rideshare driver, it is important to know that the insurance policies these companies offer are very limited and only apply under certain conditions. You must also have your own insurance.
What about Uber and Lyft insurance coverage
Anyone wishing to drive with one of these companies must be aware of what their employment status will be and how this will affect insurance as well as otherwise. Drivers for these companies are not considered employees. Instead, they are independent contractors. This is a great label for the company and their bottom line as they don’t have to provide benefits like healthcare to their drivers.
It also means that their drivers are not fully covered by the insurance policy they provide. Uber and Lyft are insured, but they don’t always cover your damages in the event of an accident. Both companies require their drivers to have their own insurance for the vehicle they drive. The insurance offered by Lyft and Uber exists mainly because some areas require them to wear it.
Since you will likely be using the same car for driving for Uber or Lyft that you use as your personal vehicle, it is important to know the different levels of coverage you will get based on how you are driving your car at the time. There are four different periods of work you may find yourself in and your coverage will cover you differently at each stage. You are:
- Period 0 – app is switched off
- Period 1 – The app is activated and you are waiting for a drive request
- Period 2 – You have accepted a ride and are on your way to pick up a passenger
- Period 3 – You have passengers in your vehicle
During the zero period, you are not covered by the ridesharing app guidelines at all. During the first period, limited liability insurance of up to USD 50,000 per injured person and up to two people and property damage insurance of USD 25,000 is available in the app. However, this coverage only applies in the event that your personal insurance is insufficient to cover all damage.
In Periods two and three, you are covered for the full amount of the Apps liability insurance of $ 1,000,000. You also have comprehensive and collision coverage, but only if you also have this in your personal policy and pay a deductible first.
This policy also pays off if another uninsured party is responsible for the accident.
It’s important to note that as with all insurance companies, the coverage provided by these apps will attempt not to pay the claims if they find a reason to decline. If your personal insurance does not include car pool insurance, you remain completely uncovered and are liable for any damage.
What buying ridesharing insurance from a leading insurer covers
If you drive your vehicle for a carpooling service and do not purchase a lift from your personal insurer, you not only run the risk of not being insured in the event of an accident, but you run the risk of your cover being revoked entirely.
With carpooling insurance, you have a number of coverage options that you should consider, what you can afford and the risks associated with lower coverage.
Who else needs ridesharing insurance?
Individuals driving for Uber or Lyft aren’t the only ones who need a lift for their insurance policy in order to be covered in an accident. Anyone driving for an app-based delivery service must also purchase this type of coverage to ensure they are covered in the event of an accident.
In an accident
Carpooling insurance is not available in all states. If you want to drive in a state that does not offer this coverage, you will need to get commercial insurance. Carpooling is still a fairly new concept in legal terms and these guidelines are even newer.
Whenever you are involved in an accident it is a good idea to consult a lawyer. In the event of a ridesharing accident, this is almost necessary. Read about ridesharing attorneys and how they helped car accident victims get the compensation they deserve.