What Insurance Do I Need as an Uber or Lyft Driver?

Uber Commercial Auto InsuranceWhen upstart taxicab competitors Uber and Lyft opened for business in southern Nevada one Tuesday afternoon, they found themselves fighting two roadblocks. One appeared courtesy of Clark County, a region whose officials were quick to complain that unless and until these two web-based renegades acquired business licenses from the county, they would have to cease operations there. The other barrier concerned the traditional taxicab companies who did not exactly welcome the new competition.

While Uber and Lyft fight for their right to operate in Clark County, the independent contractors who drive for them have something more important about which to worry. It concerns their automobile insurance. Who is responsible for covering them, and what sort of policy do they need?

The Situation

As companies that broker their services over the Internet, Uber and Lyft do not keep drivers on their payrolls. Neither of these companies owns and operates its own fleet of cabs. Passengers who wish to book a ride with them will do so via a Smartphone app that sets them up with a screened, licensed, insured and available independent driver.

The Question of Car Insurance

Although neither Uber nor Lyft hires its drivers directly, these startups do expect their motorists to carry the proper auto insurance. While each company does provide some form of supplemental coverage, the provisions of each are not entirely clear. In addition to checking for the latest updates, anyone who drives for either of these companies should take steps to ensure that his or her own personal insurance is up to the job of hauling human cargo.

Why Personal Car Insurance May Not Do the Trick

All Uber and Lyft drivers need to realize one thing: The personal insurance policies that serve quite well for their off-duty or solo driving needs might fall short of meeting their work requirements. Not all such policies will cover accidents that take place while you’re carrying passengers for hire. Many specifically state this in their list of exclusions. The sad truth is this: When a motorist with that type of policy drives his personal vehicle in the service of Uber or Lyft, he is doing so uninsured.

Don’t Get Caught Short

To avoid any potential difficulty, it’s best to read your current insurance policy carefully before you drive for either of these companies. If this document specifically states that it will cover you when driving for hire, you should be good to go. Otherwise, the deficit will normally appear in its list of exclusions.

It is also vital to check with the company that brokers your services to see whether their supplemental insurance will make up for any gaps in your own. Those who wish to be on the safest side of all will do the smart thing: They will invest in commercial insurance.

Commercial Car Insurance

Anyone who picks up passengers for money is by definition driving professionally. This is as true of the independent contractor who operates a personal vehicle on behalf of Uber or Lyft as it is of the traditional cab company’s employee. For most of these individuals, commercial car insurance will be a necessity.

That’s because anyone who drives professionally faces a daily risk of financial loss. If an accident occurs while you’re driving for hire, expenses can mount up quickly, particularly when the injured parties decide to sue.

The purchase of commercial auto insurance will protect you against these losses. In case the worst should happen, most varieties of commercial auto insurance offer the following options:

  • Bodily injury liability.
  • Property damage.
  • Collision and comprehensive.
  • Uninsured or underinsured driver loss.
  • Fire or theft.
  • Medical and rehabilitative coverage.

In the state of Nevada, bodily injury and property damage coverage is mandatory.

How All Kinds of Insurance Can Help

At All Kinds of Insurance, we understand the needs of Nevada residents who choose to drive for Uber or Lyft as independent contractors. Let one of our experienced agents review your current policy for you. Its provisions may already be sufficient. If not, we will do what we must to help you obtain the coverage you will need when driving professionally for hire.

Don’t wait another minute. Call us today at 702-543-4697 and learn what our pros can do for you.