Understanding rideshare insurance options for Uber drivers
You’ve got your car and documents, but what happens if things go wrong? Are you covered legally? Let’s take a look at the situation with Uber and car insurance.
How Uber insurance works
Uber provides insurance for drivers during the course of their duties. This very helpful fact means that you don’t necessarily have to look for and pay for special insurance to cover your car, though some drivers do so anyway for added security. The type of insurance given by Uber depends on the state you are driving in.
To be more specific:
- Driver mode off.
- You are only covered by your personal insurance while driver mode is off. You are effectively driving the car for personal use.
- Driver mode on, but no fare accepted yet.
- At this time, Uber’s contingent liability covers you, just in case your personal insurance does not. Collisions are not covered by this.
- Ride accepted, through to dropping off.
- During this period, while you are picking up, transporting and dropping off a passenger, you are covered by Uber’s commercial liability coverage. This covers damage to your vehicle from a collision, as long as you have collision coverage on your personal policy. This also covers comprehensive damage claims from non-collisions, such as fire and vandalism. Again, this only applies if your personal policy has comprehensive coverage.
Implications of Uber on your auto insurance, car loans, and car leases
Some companies have clear policies about Uber and ride sharing, while others are vague.
The golden rule is to contact your insurance company to ask how driving for Uber will affect your coverage or premium. In any case, do not hide that you use your car for Uber, as they might decide that you have broken the terms when it comes to paying out. While there are tons of drivers that will hide their driving from their insurance providers, it is better to be honest so they can work with you to get you a policy that covers you when driving.
On a different note, car loans can be voided or revoked if you are driving for Uber. This is because some car loans exclude using the car for commercial purposes. Special policies are made for business use which cost more, but will save you having to return the car or pay the rest of your loan up front. If you don’t own your car, make sure that you are either very careful, or you talk to whoever you bought the car from before you drive.
Leases generally do not cover commercial purposes at all. This arrangement rarely works out well and could result in you having to pay your lease up front, if they find out what you are using the car for.
Medical insurance coverage of the driver in an Uber accident
You should be aware of the limitations of Uber’s coverage in terms of medical insurance.
Uber’s policy does not cover the driver if they are at fault, only their passengers and third parties! However, when you are not at fault, the person who is at fault will be responsible for medical coverage. Should their insurance be insufficient, Uber steps in for the rest.
You will almost always find that in car accidents, auto insurance policies pay for medical bills (up to their limit) before personal injury or other medical policies. Medical insurance will kick in once these primary means can no longer cover bills, but may attempt to void your policy as a workplace accident if that is not covered. Also, you may still have to pay your deductible amount and certain fees, depending on your policy. When you are not at fault, your insurance companies will often seek to cover expenses from the personal who is at fault. This will be mentioned in settlement.
These rules vary from state to state, so please consult your local authority and personal policies.
How Uber insurance works in an accident
Uber insurance, like standard car insurance, hinges on which party is at fault. In other words, the person who caused the accident pays for it!
When you are at fault, you are liable to pay out. This can include damages to passengers, your car, medical bills and third parties. Uber’s commercial insurance is used here.
Uber will only cover damages to your own car (with a heavy deductible, approx. $1000!) if your personal insurance will not pay out the claim. You must seek coverage from your personal insurance first before Uber will consider it. Some insurers will not cover these situations on the basis that you are using your vehicle commercially. Be warned that in this case, your insurance most likely will not cover medical bills.
When you are not at fault, the other driver’s insurance pays out to you. Uber insurance should not have be involved. You may still wish to contact your personal insurance to help you fight for your claim. Be sure that they already know that you are using your car for Uber and still cover this usage.