Ride-hailing companies like Lyft and Uber have created the opportunity for noncommercial drivers to earn income using their own vehicles. While it’s a potentially lucrative business, there is one aspect of the career that poses a challenge for many drivers: auto insurance. Since the industry is relatively new, staying protected on the road isn't as easy as you may imagine. If you're joining the ride-hailing force, here's a closer look at three types of policies you should consider.
3 Types of Auto Insurance Coverage for Drivers in a Ride-Hailing Service
Liability coverage is designed to cover costs related to injuries or property damage if you're involved in an at-fault accident. In Montana, all drivers are required to carry at least $25,000 for bodily injury for a single person and $50,000 for two or more people, as well as $20,000 for property damage per incident. While your personal plan should offer these limits, the coverage is voided for commercial needs, e.g., driving for hire.
The lapse of coverage begins once you turn on the app and are available to work, and it continues until you go offline again. To help protect drivers while they’re online, en route to pickups, and transporting passengers, most ride-hailing companies offer some level of liability coverage. However, it’s often the minimal amount required by the state and may still require the driver to cover some of the expenses themselves.
Vehicle repairs are costly, and in at-fault accidents with only liability present, you become responsible for covering the expenses out of pocket. To extend protections to your vehicle, consider purchasing a separate commercial auto plan. While the final coverage depends on the policy, standard plans include collision protection to help cover the cost of repairs or full replacement when the vehicle is being used for commercial needs.
3. Ride-Hailing Endorsement
Since the majority of individuals don’t want to carry two policies at one time, many providers now offer specialized endorsement options. In such cases, drivers can add the rider to the personal auto insurance plan. The method allows drivers to extend their personal coverage through every aspect of the ride-hailing process.
If you’re considering entering the ride-hailing workforce, keep yourself protected with auto insurance from The Insurance Exchange in Flathead County, MT. As an independent insurance agency, the business provides clients with a wide range of coverage options. From home and auto to business and property, the agents are committed to one-on-one, friendly service. Learn more about the providers they work with online, and request your personalized insurance quote today at (406) 756-2500.