Will My Car Insurance Cancel Me if I Also Drive for UBER or LYFT?

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Uber and Lyft are two ride-hailing services that offer a quick and easy way to get from point A to point B without the hassles and other costs that come with using a taxi service. Uber and Lyft also provide car owners with a convenient way to earn money on their own schedules as drivers.

If you are a Uber or Lyft driver in Portland -- or you’re thinking about signing up -- you may have questions about car insurance.

  • Will your car insurance cancel you?

  • Does your personal insurance cover you while you’re driving for pay?

  • Do Uber and Lyft provide their own insurance?

  • What happens if you get in an accident?

I’ll answer those questions and more in this post.

How Are Uber and Lyft Different than a Regular Taxi Service?

Uber and Lyft are similar to most taxi services in that they don’t own or operate their cars and they don’t hire drivers directly-- instead treating them as independent contractors. However, almost anyone who has a car can drive for Uber or Lyft as long as they meet a few simple qualifications and can pass a background check.

The real difference is that many Uber and Lyft drivers use their cars for both business and personal use, which makes car insurance more confusing.

Will My Personal Insurance Cover Me?

Interestingly, having car insurance is a requirement for becoming an Uber or Lyft driver, but that insurance may not actually cover you while you’re driving as a professional driver.

Many private insurance policies specifically exclude driving for hire in their coverage. That means, Uber or Lyft drivers with such insurance policies are not covered while they’re driving for pay.

In fact, driving with Uber or Lyft can potentially put you at risk for having your insurance dropped or your claim denied if your insurance company finds out you’re driving for pay. But that depends on your insurance company’s policies.

Do Uber and Lyft Provide Any Insurance?

Uber and Lyft do provide some supplemental car insurance which only covers you when you are actively driving professionally and have your smartphone app switched on -- not when you’re driving for any other reason.

This supplemental insurance also depends on what stage of the ride hailing process you’re at:

If you’re logged in and waiting for a ride request…

Both Uber and Lyft provide contingent liability coverage that pays only for losses not covered by your personal policy. This insurance will pay:

  • Up to $50,000 of bodily injury costs of an individual (you)

  • Up to $100,000 in bodily injury costs of everyone in the vehicle

  • Up to $25,000 in property damage costs

If you’re driving passengers or on the way to pick them up...

Both Uber and Lyft provide:

  • Commercial liability insurance with a $1 million limit

  • Uninsured/underinsured bodily injury with $1 million limit

  • Contingent comprehensive and collision coverage

This contingent comprehensive and collision coverage differs slightly between Uber and Lyft. Uber has a $1,000 deductible, and Lyft has a $2,500 deductible and a limit of $50,000. You should know that both deductibles are dependent on you having your own personal comprehensive and collision coverage too.

Uber also provides some personal injury protection coverage in some states that require it by law.

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What Insurance Do I Need?

There’s no doubt that driving with a company like Uber or Lyft can make insurance complicated.

The good news is, many insurance companies have recognized the need for new and different insurance policy options. Farmers, GEICO, Progressive, USAA, and others have started testing new policies specifically designed for ride-hailing drivers in some states. Unfortunately, these policies aren’t available in Oregon yet, but they may be soon.

Here is my advice:

Get the best personal insurance policy you can afford, preferably one you know won’t drop your coverage or deny your claim if you get in an accident while driving professionally. Make sure you understand the fine print or consult a lawyer you trust.

Check local laws and regulations. Different states and cities have their own rules when it comes to Uber and Lyft drivers. For example, some cities actually require Uber and Lyft drivers to have a commercial driver’s license. Portland does not.

Remember, driving for companies like Uber and Lyft can be a great way to earn money, but with them, you’re an independent contractor, not an employee, which means you’re responsible for understanding your own insurance and paying for any damages your insurance doesn’t cover.

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Need Professional Advice?

Every situation is unique and insurance policies vary. If you still have questions about how to protect yourself as a professional driver, or if you’re dealing with insurance problems after an accident, I can help.

You need an experienced attorney who is well versed in the complex world of insurance policies and claims as well as personal injury law.

Call my office today at (503) 498-6985 to schedule a free, confidential consultation.