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With the propagation of rideshare apps like Lyft® and Uber®, more and more people are taking to the streets to earn money as a driver. However, when you drive for commercial purposes, it affects your car insurance needs. To make sure you are compliant and fully protected, the information below should help you understand what types of auto insurance you need as a rideshare driver.

What Types of Car Insurance Do You Need as a Rideshare Driver?

1. Liability Insurance

For any type of driving, whether it's for commercial or personal transportation, you must maintain the legal minimum amounts of liability insurance. Indiana is a 25/50/10 state, which means the Bureau of Motor Vehicles requires drivers to maintain at least $25,000 of bodily injury liability coverage per injured person, with a $50,000 per-accident maximum and $10,000 of personal property liability.

This does not cover damages to your own vehicle or your passengers' injuries. It only covers losses suffered by other motorists, pedestrians, and property owners. Also, these are only the legal minimums; you should consider raising these limits for greater protection.

2. Commercial Auto Insurance

car insuranceFor personal car insurance claims, most insurers exclude coverage for losses that occur during the use of the vehicle for commercial purposes. Ridesharing counts as commercial use, so your personal car insurance policy likely won't cover you if an accident occurs while you're working. Many commercial policies boost liability limits significantly—often to $1 million or more. They also usually include collision and comprehensive coverage, which protect your vehicle against accident damages (collision) and non-driving losses due to fires, storms, floods, vandalism, and theft (comprehensive).

Additionally, they also often include uninsured/underinsured motorist coverage, which pays for any losses you sustain that an at-fault driver's policy—if any—does not cover. It keeps you from going out of pocket due to no fault of your own.

3. Rideshare Periods

Insurers break rideshare duties into three periods: when the app is open but you have no riders, after you've been assigned a rider but before you've picked them up, and the period between pickup and dropoff. Lyft offers car insurance that varies during these periods. For instance, it offers low liability limits and no comprehensive or collision during period 1, but once you have been assigned a driver, the protections kick in. Therefore, to make sure you are fully protected, you should discuss your needs with a private insurance agent, even if you opt to purchase coverage from Lyft.


If you are—or are hoping to be—a driver for Lyft or Uber, contact David R. Johnson Insurance Agency Inc in Beech Grove, IN, for expert advice designing a car insurance policy. He serves clients throughout the Greater Indianapolis area and specializes in auto, home, life, Medicare, and renters insurance. Visit their website to view a map and business hours or call (317) 782-8858 to request a free car insurance quote.

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