Driving for Uber, Lyft, or other ridesharing companies can be a good source of extra income. But since you are making money out of it, every time you use your car to drive for this purpose, you are no longer covered by your personal car insurance policy. This is where commercial car insurance or a rideshare insurance option will step in. Here’s what you need to know about them.
Your rideshare company may not cover you all the way
There are three phases when you drive around for a rideshare company. The first phase is when you are logged in to the app, and you are waiting for a customer to hail for a vehicle. Phase two is when you are driving towards where your customer is located to pick them up. The last phase is when you drive them to where they wanted to go. Your rideshare insurance will only cover you for phases two and three. During phase one, you have no coverage.
About your personal auto insurance
You may be led to think that your personal auto insurance will be active during the first phase, but it won’t. The moment that you took out your car on the road for the purpose of business, your personal car insurance policy is already void. You either need to have commercial car insurance to cover you or check with your carrier to apply for a rideshare insurance option. Just take note that not all carriers offer this.
What to do
Once you have decided that you will be driving for a rideshare company, tell your auto insurance agent right away. If they find out that you have been driving for this purpose without informing them, they will be canceling your policy on the spot. Even if they don’t find out, you will be in danger of driving around without coverage. Let them know so you will know what they can offer.