In this guide
If you drive for a rideshare or delivery app, your personal car insurance policy may not cover you while the app is on. The rideshare company provides some coverage, but it changes depending on whether you are waiting for a request, on your way to a passenger or carrying one, and it may leave gaps. Many drivers fill those gaps with a rideshare endorsement or a hybrid policy. Details change, so confirm current terms with the app company, your insurer and your state.
Key takeaways
- Many personal auto policies exclude driving a vehicle for livery or commercial purposes, which can include rideshare.
- Coverage is usually described in three periods: app on and waiting, ride accepted, and passenger in the car.
- The waiting period is the most common gap, and collision and comprehensive for your own car may be limited.
- Rideshare endorsements and other policies exist to fill gaps, and availability varies by state and insurer.
- App-company coverage terms change. Always check current terms for your state.
Why your personal policy may not be enough
A personal auto policy is designed for personal use. The National Association of Insurance Commissioners (NAIC) says most personal auto policies continue to exclude coverage when a vehicle is being used for livery or commercial purposes, and that this can affect liability, personal injury protection, comprehensive and collision, and uninsured and underinsured motorist coverages. The model law used in many states expressly allows personal policies to exclude this kind of driving.
That means a crash while you're logged into the app could be denied by your personal insurer, even if you'd normally be covered. It's also why you should tell your insurer if you drive for an app, because failing to do so may risk your coverage. Rules differ by insurer, so ask directly. For basics on how the policy pieces fit together, see car insurance coverage types explained.
The three coverage periods
The NAIC describes rideshare driving in periods, and many state laws use the same structure. The names and details vary by state and company, but the basic idea is the following.
| Period | What's happening | Who generally covers it |
|---|---|---|
| Period 1 | App is on, waiting for a ride request | Limited coverage from the app company. Your personal policy may exclude it. Some states set minimum liability limits for this period |
| Period 2 | Ride accepted, driving to the passenger | The app company's coverage generally applies |
| Period 3 | Passenger in the car | The app company's coverage generally applies |
| App off | Not logged in or on a personal trip | Your personal policy, as usual |
The NAIC says some state laws combine Periods 2 and 3, and require higher limits while the driver is engaged in a ride. It also reports that the major app companies provide $1 million in primary commercial liability during those engaged periods. For Period 1, it says some states require limits of $50,000 per person, $100,000 per incident and $25,000 for property damage. These figures, and the app companies' policies, can change, so confirm the current terms for your state on the company's insurance page.
Good to know: Nearly all states and D.C. have laws on this topic, many based on a model bill. The details differ by state, and your state insurance department can tell you what applies to you.
Where the gaps are
- Waiting for a request (Period 1). This is the most common gap. The app company's coverage is more limited, and your personal policy may exclude the use. If neither policy clearly applies, you could face a large bill after a crash.
- Your own car's damage. The NAIC notes that most state laws don't require collision or comprehensive coverage while the app is on and no passenger is connected. Some app-company coverage for your car depends on you carrying collision or comprehensive on your own policy, and then carries a deductible you must pay.
- Medical, PIP and uninsured motorist coverage. The model bill doesn't require these, so protection for you and your passengers can vary.
- The deductible. If the app's policy applies to your car's damage, a deductible usually applies. Some personal coverage options help pay it.
- Delivery driving. Food or package delivery may be treated differently from passenger rides. Terms vary by company and state, so read them.
- Loan or lease terms. Your lender may require disclosure of commercial use. See car insurance for leased and financed cars.
Ways to fill the gaps
The NAIC says rideshare endorsements and hybrid policies are widely available. Options include:
- A rideshare endorsement added to your personal policy. It extends your coverage to the periods that your base policy would otherwise exclude. Availability and pricing vary by insurer and state.
- A hybrid or rideshare-specific policy. A policy built for both personal and rideshare use.
- A commercial auto policy. Sometimes needed for fleet-style driving or where an endorsement isn't offered. See commercial auto insurance.
- Higher personal limits or an umbrella. If your personal policy applies at all, higher limits help. See umbrella insurance explained.
Ask each insurer: Does it offer a rideshare endorsement in my state? Which periods does it cover? What are the limits and deductibles? What isn't covered? Compare quotes from several insurers, since some don't offer rideshare coverage at all.
Questions to ask before you drive
- Do I currently have a policy exclusion for livery or commercial use? Read the policy language.
- What does the app company cover in each period in my state, and what are the deductibles?
- Do I need collision and comprehensive to qualify for the app company's coverage on my car?
- Do I need to tell my insurer and my lender?
- Is delivery driving covered the same way as passenger rides?
- Who is covered if I let someone else drive my car for the app? (Often not allowed.)
Write down the answers and keep a copy of the app company's current insurance summary. Ask your insurer to confirm the endorsement in writing and keep your proof of insurance handy, along with any app-provided coverage documents.
If you have a crash while driving for an app
- Follow the usual safety and reporting steps. See what to do after a car accident.
- Report the crash to the app company right away through its process, noting what status you were in at the time.
- Notify your own insurer as well, as your policy may require it, and be accurate about what you were doing.
- Keep records of the app status, trip data and screenshots, if available.
Understanding the claim process helps. See how car insurance claims work and, if there's a dispute, how to dispute a claim decision.
Taxes, business and other notes
Rideshare drivers are often treated as independent contractors. If that applies to you, you may need business-type coverage or advice beyond auto insurance. See insurance for freelancers and independent contractors. Tax questions belong with a tax professional.
Frequently asked questions
Does my personal insurance cover me while I drive for an app?
Often not while the app is on, because many personal policies exclude commercial or livery use. Ask your insurer what applies and whether it offers an endorsement.
What is Period 1?
It's when you're logged into the app and waiting for a ride request. Coverage is typically more limited, and this is the most common gap.
Do I have to tell my insurer I drive for an app?
You generally should. Failing to disclose commercial use may give an insurer grounds to deny a claim or end coverage, depending on the policy and state law.
Who pays for damage to my own car?
It depends on the period and what you carry. Collision and comprehensive on your policy, plus the app's coverage and deductible, usually decide it. Rules vary.
Are these rules the same everywhere?
No. State laws differ, and app-company terms change. Check your state insurance department and the app's current insurance information.
Sources
- NAIC – Commercial Ride-Sharing
- Illinois Department of Insurance – Car sharing
- California Public Utilities Commission – Transportation Network Companies
- NAMIC – Ride-sharing issue brief
General information only. This guide explains general concepts and is not insurance, legal or financial advice. Rules and prices vary by state and insurer. Check your policy documents and speak to a licensed insurance professional or your state insurance department about your situation.