1/3 of Americans use rideshare apps like Uber and Lyft.

These companies offer fast service to get you from point A to point B, while charging significantly less than traditional taxi services.

These companies also offer convenient employment opportunities. Rideshare drivers can work whenever they want and collect tips for providing good service.

So what’s the catch? Rideshare drivers often find themselves with an insurance gap between the coverage their company provides and the coverage provided by their personal auto insurance.

Should an accident occur, drivers with gaps in coverage could be in for an unpleasant surprise. This affects all of us, as rideshare drivers do injure pedestrians and those in other vehicles.

If they do not have proper coverage, you may have difficulty collecting compensation for your damages.

Keep reading for more information about the conflict between ride sharing and personal auto insurance.

The Personal Auto Insurance Gap

Due to the nature of working for a rideshare company, there are several scenarios that are commonly experienced in which different insurance would apply.

Let’s go through each of these scenarios one by one.

Scenario 1

When you are not logged into the rideshare app, you are considered off the clock.

If you are on your way to the area you are going to drive in for your company but are not logged in and working, you are off the clock. In this case, your personal auto insurance will be the only one to provide coverage.

Scenario 2

Once you have logged into your rideshare app, you are on the clock.

Your personal auto insurance company will likely deny any claims because you were using your vehicle for business purposes, unless you have a rideshare endorsement on your policy.

Say you are driving around, logged into the app, and waiting for a passenger to request a ride. You will not have coverage with your personal auto insurance.

Because you are not in route to pick up a passenger and are not transporting anyone, your rideshare company will not provide coverage for damage to your vehicle. They may provide some liability coverage, but it will be limited.

This is where the gap occurs.

Scenario 3

You have found a client and are in route to pick them up.

Your rideshare company will insure you in this scenario.

Scenario 4

You are transporting your passenger to their destination.

Again, your rideshare company will cover you and your passenger in this scenario. However, the coverage might not be great.

It’s important to learn about what coverage you have before you get behind the wheel. If you are involved in an accident while driving for a rideshare company, you should contact a car crash attorney who can help you navigate your insurance coverage.

Mind the Gap

If you are a driver, rider, or pedestrian in an area where rideshare use is common, it’s important to be aware of the gap between drivers’ personal auto insurance and the rideshare company’s insurance.

Anyone can be affected by this if they are involved in an accident with a rideshare driver.

For more auto topics, check out our blog.