5 common rideshare insurance misconceptions debunked

Overview: Navigating insurance for rideshare driving can be confusing, and there are many common misconceptions about insurance coverage. Some drivers mistakenly believe their personal auto policies will cover all rideshare activities, while others think that rideshare companies provide full coverage for their drivers. By understanding these misconceptions, drivers can better protect themselves throughout their rideshare journey. Because rideshare driving comes with different types of risks, securing appropriate insurance across all periods of the rideshare process can help offer protection.

As rideshare apps continue to grow in popularity, there are many misconceptions about how rideshare insurance works. These rideshare myths could leave drivers financially vulnerable in the event of an accident. Understanding the truth about rideshare insurance coverage is about helping to protect yourself when driving for a rideshare company.

Understanding the three periods of rideshare services

The rideshare process often occurs in three periods:

• Period one (app on, waiting for match) — you’re available for rides but haven’t been matched with a passenger.
• Period two (matched with a rider) — you’ve accepted the ride request and are en route to pick up your passenger.
• Period three (passenger occupying vehicle) — you’ve picked up your passenger and they are occupying your car.

The coverage offered by your rideshare company and personal insurance company varies throughout all three periods. Because of this, it is easy to be confused about how insurance works for rideshare drivers.

Debunking five common rideshare insurance misconceptions

Why understanding rideshare insurance matters

Believing the common myths listed above could put rideshare drivers at financial risk. Here’s how:

• Denied claims — relying fully on personal auto insurance or your rideshare company’s coverage can lead to coverage issues, leaving you with out-of-pocket costs.
• High deductibles — rideshare company insurance covers certain damages during Periods two and three (when you have accepted a ride and are en route to pick-up a passenger or a customer is occupying your car). However, these deductibles often range between $1,000 — $2,500, and you will likely be responsible for paying that amount upfront for repairs to your auto.
• Policy cancellation — if your personal insurer realizes that you’re ridesharing without notifying them or obtaining the proper endorsement, they might cancel your policy altogether.

Helping protect yourself means knowing how different insurance coverages apply across all rideshare periods.

Recognizing your rideshare coverage options

Relying on assumptions when it comes to rideshare insurance can impact your finances. As you are looking for rideshare coverage, it is helpful to:

• Explore rideshare coverage options — explore multiple options online to see how much rideshare coverage and car insurance you will need.
• Talk to your insurance provider ­— let your provider know when you are ridesharing and ask about policy options and rideshare endorsements.
• Ask about specific rideshare coverage — familiarize yourself with the "periods" of rideshare driving and when each coverage would apply.
• Review policy details carefully — pay close attention to liability limits, deductibles and exclusions when comparing coverage options.

Safeguarding your ridesharing career

Rideshare driving can be a rewarding profession or side hustle, but navigating insurance can be confusing. It’s important to understand rideshare insurance misconceptions, which could lead to financial hardship.

When you understand how rideshare insurance coverage works, you can help protect yourself and your finances. To get clear answers about rideshare insurance coverage options, contact a State Farm agent today or explore quotes online.