First off, thank you for providing such an outstanding service. Your decision to drive for the rideshare services Uber and/or Lyft – also known as Transportation Network Carriers, or TNCs – has made it infinitely easier for countless travelers across California to get to their destinations quickly, safely and cost-effectively. You have helped myriad people get to work when their own cars were in the shop, to the airport at the most inconvenient hours, and back home after a night of partying without endangering others on the road or risking a DUI.

What you do is actually heroic, down to the bottles of water you keep in the back for thirsty passengers. Hopefully, you find driving for a TNC to be fun, entertaining, and financially rewarding. All those hours on the road aren’t always easy. Some passengers are grumpy. Others get sick all over your upholstery. Here’s hoping the majority are enjoyable and exciting. Oh, and great tippers. You’ve earned it.

Whether driving for a TNC is your main gig or a side-hustle, the fact is that the more you drive, the more likely you are to be involved in a car accident.

Hopefully, that will never be the case. But it’s always good to be prepared for whatever may come, so let’s talk about your TNC’s insurance protection just so you know what you can likely expect. We’ll keep it short, sweet and painless because you have a busy schedule. But it’s worth spending a few minutes reading through all that’s provided here.

Uber and Lyft are famous for boasting about their $1 million insurance protection. But how protected are you? When does this $1 million protection kick in? What does it cover? And what role does your personal auto insurance policy play?

This article seeks to end some of the confusion about when and how well you’re covered by your rideshare company’s insurance, how to bridge the gap with your personal insurance, and what measures you should take to best protect yourself should you be involved in a car accident.

Your rideshare company’s coverage options vary by periods, which are different stages in your service as a driver. Whenever you drive with your TNC app turned off, you’re considered to be in Period 0. During this time, Uber and Lyft are in no way involved, and you file any accident claims with your personal auto insurance provider.

Period 1 – Period 1 commences the moment you turn on your Uber and/or Lyft app(s) until the time you get matched with a passenger. Some drivers use Period 1 as a time to drive around performing their daily routines but don’t necessarily accept passengers so they can write off the mileage. Bad idea. Period 1 is the time when many drivers aren’t fully or safely insured, either by their TNC or their personal insurance.

Here’s the skinny on Period 1 coverage in California. Both Uber and Lyft cover these primary insurance limits when you cause an accident during Period 1 (the app is on, but you’re not matched with a passenger):

• $50,000 per person per accident – this isn’t much if someone in the other car is seriously hurt or even killed
• $100,000 total injury per accident – if any single person is hurt beyond $50,000, or there are several people injured, and the costs go above $100k, your TNC won’t pay for it.
• $30,000 property damage liability – again, this covers the other car, utility pole, storefront, whatever you hit that didn’t belong to you.

Something California Drivers Should Know: According to the California Public Utilities Commission, which regulates insurance requirements for TNCs, Uber and Lyft must provide liability coverage of $30,000 for property damage, not $25,000 as stated on both companies’ websites and in their apps. In addition, TNCs must maintain excess coverage during Period 1 of the following:

• $200,000 minimum liability per occurrence, provided you, the driver, can prove your personal insurance covers your use of your vehicle to drive for a TNC.

This means that while in Period 1, the liability coverage provided by your TNC doubles, as long as you maintain something called a “rideshare endorsement” in your personal policy.

A rideshare endorsement is an addition to your personal auto policy that:

• Insures you and your vehicle during the gap when you’re in a grey area like Period 1.
• Creates a written record that your insurer knows you’re driving for a TNC so they can’t use the commercial use of your vehicle as a reason to drop you as a customer if you’re ever in an accident.

Without personal coverage, any time you’re in Period 0, you have no coverage. And in Period 1, even though your TNC’s liability coverage may be adequate, your TNC offers no medical coverage for you, and no collision, comprehensive or UM/UIM coverage, so all of your car damage, injuries and personal losses are dependent on your personal insurance coverage. So make sure you have it and keep it current.

Bottom Line: Get a rideshare endorsement included in your personal auto insurance policy.

In most states, TNCs offer contingent liability coverage, meaning drivers must carry a personal auto liability policy to gain coverage from their TNC’s liability coverage. But in California, TNCs can’t offer contingent liability, meaning even if you have no auto insurance coverage, your TNC must provide liability insurance anyway. Your TNC made sure you were adequately covered when you were hired to drive for them, but if you let your insurance lapse or it is insufficient, their liability insurance will kick in up to their meager limits.

That might sound like added protection in the event you ever forget to pay your auto insurance bill, but don’t get too comfortable. The State of California requires rideshare drivers to maintain either a commercial policy, which is pricey or a rideshare endorsement in their personal auto insurance policies. In the event of an accident you caused, or if you’re hit by an uninsured or underinsured motorist during Period 1, you must file a claim through your personal insurance if you want to be personally protected.

If you don’t have a rideshare-friendly auto policy, your insurance company can legally deny your claim because you were using your vehicle as a business, which personal auto policies don’t allow. To make matters worse, your insurance company will likely cancel your policy on the spot. Sure, your TNC will pay up to their limits for the damages you caused, but you could be sued for any excess and will have no coverage for your own injuries or losses. Oh, and you’ll be out-of-pocket for your TNC’s deductible. Uber’s is $1000. Lyft’s is $2500. Ouch.

If it is determined the other driver was at fault, their insurance will be tapped for your injuries and losses. If they don’t have insurance or are underinsured, you will have to rely on your personal insurance to cover your injuries and losses, including car damage. And again, if you don’t have rideshare-friendly insurance, your claim may be denied by your personal insurance provider, leaving you holding the bag for your own bodily injuries and vehicular damage.

During Period 1, if you hit a pedestrian, cyclist or the occupants of another vehicle, injured parties can sue your TNC and/or your personal insurance company and/or you personally. TNC’s liability limits in these cases are:

• $250,000 per person
• $300,000 total injury per accident (all injuries to all parties)

Clearly, your TNC has deeper pockets than you do, but victims can sue you personally, too. Without appropriate personal auto insurance, you could find yourself at the wrong end of a costly lawsuit.

Bottom Line: Get a rideshare endorsement or gap coverage added to your auto insurance policy. Gap coverage is inexpensive, and some companies offer cost-effective coverage across all driving periods with lower deductibles than Uber’s and especially Lyft’s.

Once you accept a passenger and are en route to pick them up, you are considered to be in Period 2. Once you pick up your passenger until the time the ride ends in your app, or until the passenger exits your vehicle, whichever is later, you are in Period 3. In California, both Uber and Lyft offer the following coverage during Periods 2 and 3:

• $1 million primary commercial insurance – A primary liability policy is the first policy to respond to a loss or claim. So they should be the first to pay a claim, right? In spite of this, both Uber and Lyft are legally able to request that you submit your claim through your personal insurance first. However, their coverage is not dependent on your insurance first declining your claim. While your app is on, they are your primary policy, but again, their coverage is liability only, so if you’re at fault, your injuries and car aren’t covered – that will fall on your auto policy.
• If you’re not at fault, and their coverage limits are enough, and you don’t mind their respective deductibles (or they don’t apply), you can depend solely on your TNC’s insurance. If you need more coverage, both your personal policy and your TNC’s may apply.
• If your insurance is insufficient, your TNC’s insurance will cover any injury or damages over your auto policy’s limits to cover bodily injuries or fatality you may cause to your passengers and to any other driver(s) and their passenger(s), as well as pedestrians, cyclists and the passengers in other cars.
• $1 million UM/UIM coverage – Though not required by the state of California during Period 2, both Uber and Lyft provide uninsured/underinsured coverage from the moment a passenger accepts a ride until the ride is over (both Periods 2 and 3).

Before we continue, let’s point out a couple of essential considerations.

There’s a gray area during Period 2 when you have accepted a ride request but haven’t yet picked up a passenger. Let’s say you get into an accident during this period. Once you don’t show up as expected, your passenger will naturally cancel the ride and move on to another driver. TNCs have fought drivers caught in this situation in an attempt to avoid providing Period 2 insurance coverage. If you’re in an accident while in Period 2 and it’s feasible to do so, try to take a screenshot of your phone to have as proof that you were en route to pick up a ride request.

If you’re the victim of a hit-and-run, proving the accident wasn’t your fault may fall on you. So be sure to take pictures, find witnesses and call the police to file a report. If you can establish the other driver was at fault and took off, your TNC’s UM/UIM coverage will apply.

Uber and Lyft both offer contingent collision insurance, which covers damage to your car in a crash, and comprehensive insurance, which covers damage to your vehicle due to other forces, like theft, vandalism, fire, and so forth. But these coverage types are both contingents, meaning you must have one or both on your personal policy. If your personal policy has a rideshare endorsement and collision and/or comprehensive coverage, your TNC will cover the excess of your personal policy’s limits, even when you’re at fault. But don’t expect a windfall – they limit payment to the determined cash value of your car, minus Uber’s $1000 deductible and Lyft’s $2500 deductible. Most people’s personal policies have lower limits, meaning you’d likely do better submitting a claim to your own insurance.

This is no accident (pardon the pun). TNC’s insurance companies don’t want to pay out whenever they don’t have to, so their collision and comprehensive pay only the cash value of your car or the cost of repairs, whichever is less. That often isn’t that much. But if your limits are below that, they will pay the excess…again, minus their respective deductibles.

If the at-fault driver has no insurance, there is no deductible for bodily injury, but there is for collision and comprehensive, you will pay the deductible to repair your car. If the at-fault driver has insurance, their insurance company will pay up to the limits on their policy. If it’s not enough to cover the damage, your TNC will pay for any overage up to its limits, minus your deductible. So either way, there’s a good chance money will come out of your pocket.

Bottom Line: If you drive often for a TNC, you may want to get a personal insurance policy that covers you during Periods 1, 2 and 3, and carries a low deductible, or one that will reimburse you for the difference between your personal policy’s deductible and your TNC’s (Allstate currently offers this option).

A small extra cost per month is a small price to pay for security and financial protection.

A recent survey showed that nearly half of all rideshare drivers don’t have a rideshare endorsement in their personal auto policy, often because they don’t know they need one. Some drivers find out the hard way, after they get into an accident and their claim is denied by their insurance company, and they’re left paying for their car’s damages and personal injuries out-of-pocket. And oftentimes, they find their insurance promptly canceled for policy violation. That’s a nightmare no one needs.

During Period 1, your TNC’s liability insurance covers only the damage you cause to another person and/or another party’s property, meaning the other driver’s car, the stop sign you hit, etc. If you’re at fault, your vehicle and medical bills are not covered by your TNC’s policy. And if your personal insurance denies your claim because you were caught driving for commercial purposes without appropriate insurance, you may find yourself shouldering a hefty financial burden.

And, as stated before, even when a collision is not your fault, Uber and Lyft’s deductibles ($1000/$2500) are probably higher than your personal insurance policy’s.

Adding a TNC endorsement to your personal insurance ensures that you and your vehicle will be covered in an accident and that your provider won’t cancel your policy for operating your vehicle for commercial use.

TNC insurance endorsements add about 5%-20% to your personal policy, but the extra cost is worth it. Some cheaper policies, called gap policies, cover you only during Period 1 and pricier ones cover you during all periods, and for reasons covered earlier, full personal coverage through all periods can be superior to what Uber and Lyft offer in many instances. Your insurance company may not offer a TNC endorsement and, if not, you would be wise to switch to one that does. You can’t buy a rideshare endorsement from a separate insurer as an add-on – it must be contained in your personal auto insurance policy.

At the time of this writing, a few California insurance companies offer rideshare-friendly, aka “hybrid” options, from less expensive gap coverage to extended coverage that protects you during every driving period, from Period 0 (personal driving) through Period 3.

• Allstate – Provides gap coverage for Period 1 and covers the difference between your personal and TNC’s deductible. (877) 810-2920
• Farmers – Provides gap coverage for Period 1. (888) 327-6335
• Mercury – Provides gap coverage for Period 1. (866) 407-8014
• Geico – Adds about $150 a year for coverage for Periods 1 – 3. (800) 207-7847

Side note: if you drive for Lyft, their Lyft-partner Rideshare policy covers you through Periods 0-3 and comes with a 25-cent-per-ride credit, up to $500 every 6 months.

• State Farm – Adds 15-20% to current policy, more than most, but covers Periods 1-3. (844) 242-1899
• USAA – Provides gap insurance for Period 1. (800) 531-8722

Side Note: USAA is for active military members, veterans, and their families only.

• Esurance – Provides gap coverage for Period 1. (800) 378-7262

Again, the added cost of a rideshare endorsement isn’t much, and it’s totally worth it. However, if you’re in a situation where every penny counts (and who isn’t these days?) you can keep costs at a minimum by considering the following:

• The type of coverage you choose. Gap insurance covers you during Period 1 and also ensures your insurance coverage won’t be canceled for driving commercially. It typically adds about $6 a month to your bill. Extended coverage offers the best protection, and adds about $20 a month. Skip a couple of premium coffee drinks or a night at the movies, and it’s paid for. 

• How much you drive. If you don’t drive that much, you may qualify for a reduced premium. CSAA, for example, offers drivers discounts for driving less frequently. Ask your insurance provider. You may also get a cheaper rate if you bundle your auto insurance with your home or renter’s insurance. 

• Your car. Some cars are cheaper to drive and maintain than others. If you love your car, it may be worth paying a little more to insure it. But if it’s not something you’re passionate about, it may save you money on insurance, gas, maintenance, and repairs to trade your car in for something more economical, especially if you’re driving a lot of miles for your TNC. 

• Your insurer. You may have smaller regional insurance carriers in your area that offer great rates on rideshare-friendly auto insurance. The ones we named here are the biggies, whose rates may be more than a local company that doesn’t have the advertising expense of the bigger, often-pricier firms, so shop around. 

Side note: If you’re worried about your credit score affecting your auto insurance rates, don’t be. You’re in wonderful California! It’s illegal for auto insurers to base their rates on a poor credit rating. Just one more thing to love about living here!  

Not to belabor the point, but let’s say Period 1 is a “gap” period where your personal auto insurance won’t cover you, and your TNC’s insurance coverage is for liability only, meaning it will offer moderate coverage for other people’s injuries and car damage, not yours. And the caps on your TNC’s liability may not cover a major collision or injury, so unless you have rideshare-friendly insurance, the next in line to pay for any excess in costs is you. 

Bottom Line: Maintain a TNC endorsement in your personal policy. Gap coverage is inexpensive, usually adding only a few extra dollars a month, and a total bargain when you consider the legal and financial protection you’ll get from it.

Hopefully, you’ll never need to refer to this section, but in case you do, here are some crucial steps to help promote the best outcome for all involved:

1. Make sure you and others are okay. If you’re in the middle of traffic and it’s possible to pull over to the side of the road, do, and then call 911 as soon as you can. If it’s not feasible to pull over, try to stay in your car unless doing so presents a greater danger. If you were en route to pick up a passenger but hadn’t yet picked them up, try to take a screenshot of your phone to prove you were in Period 2.

2. Police usually show up after a 911 call to first responders, but if they don’t, call them immediately. You will need to file a police report before you leave the scene. It’s the law.

3. If at all possible, try to gather names, license numbers, plate numbers, insurance information and all other relevant data from other parties, including any passengers (assuming they’re not hurt, of course) and witnesses. If possible, take photos of drivers’ licenses, the accident scene (if the involved cars are still in place after the collision) and any car damage. You may need this information should your personal or TNC insurance claim be denied.

Side Note: It’s rattling to be in an accident, even a relatively minor one. If possible, use your phone to record audio or video of people’s names, phone numbers, and accounts of the accident while it is still fresh in their minds.

4. If you subscribe to a towing service, call them directly. Don’t let the police do it for you. Oftentimes police calls to towing companies are intercepted by unscrupulous outside towers who show up and hold your auto hostage until you pay them. That’s an ugly surprise you don’t need.

5. Words of advice: Do NOT speak to either your auto insurance agent or your TNC’s insurance company at this time, especially if anyone, including you, is injured. An insurance company may use your words against you to deny or mitigate your claim. Remember, it’s their job to pay out as little as they can get away with. So, if damages or injuries are serious, it is advisable to talk to an accident injury attorney who has experience defending rideshare drivers and submitting their claims to insurance for the most satisfactory outcome for all involved.

6. Seek medical attention if you’re injured. Even in a significant fender-bender, you may have soft tissue injuries that won’t show up until after your adrenaline wears off. Don’t assume that just because you and any passenger(s) feel fine immediately afterward that no one was hurt. Whiplash, sprains, muscle spasms, even broken bones, may not be immediately apparent. Rapid medical attention may help prevent undue suffering and incapacity, so get a medical exam as soon as it is feasible. You may want to recommend that your passengers get checked out, too. If there are injuries to you and/or anyone else involved, it is especially important to talk to an experienced accident injury attorney before you talk to any insurance personnel.

1. If no one is hurt and the damage is limited to the car(s) involved, you may want to first call the police station and ask for a copy of the police report so you can make sure the information is correct and establish who the police say caused the accident.

2. Contact your personal insurance company. If the other party caused the accident or the accident is in dispute, give your agent the other person’s insurance information so the insurance agents can haggle it out. Provide your agent with as much information as possible, so they are fully armed. If you’re found not to be at fault, your deductible will be waived.

3. Contact your TNC. Give them all the same information you provided your personal insurance company. Remember that while the accident is being investigated, and until your car is repaired, you will be deactivated as a driver. This can take weeks, so try to be patient. 

• Invest in a dash-cam to provide evidence in a claim.

• Consider a lower deductible on your policy or one that is reduced every period you go without an accident. The more you drive, the higher the chance you’ll be involved in a collision, and a high deductible can be a strain on the wallet.

• Make sure you have sufficient insurance coverage for how much you drive. If you get into an accident during Period 1 or are injured in an accident that is your fault, your TNC won’t cover your injuries, so make sure you have enough medical coverage. Be sure to have enough collision insurance to repair or replace your car, since Uber and Lyft will pay the lowest amount possible, and only after their high deductible is paid.

• If you drive for Uber only, consider their Partner Injury Protection. Uber partners with Aon, an insurer that offers Driver Injury Protection for under 4 cents a mile. As of this writing, drivers are charged for only the miles they drive with the Uber app on (Periods 1 – 3). This policy offers:

1. 1. Medical expenses: Up to $1,000,000 with no deductible or co-pay
   2. Disability payments: Up to $500 a week in income replacement for lost earnings
   3. Survivors benefits: For your family’s financial stability

This coverage will help you in case you’re at fault for an accident or in an accident during Period 1. Certain qualifications are required. For more information, visit Uber.com.

• If you drive for Lyft exclusively or often, consider getting a Rideshare policy with Geico, a Lyft partner. Geico’s Rideshare policy covers you during all Periods (0-3), and credits you with $0.25 for each completed Lyft ride, up to $500 extra every six months. If you perform a lot of Lyft rides, this can take a huge chunk out of your auto insurance bill.

• As mentioned before, if you’re in an accident, your driver status will probably be deactivated by your TNC while they investigate. If your car has any damage beyond minor scrapes, it must be repaired before you can drive for your TNC again. If you rely on rideshare driving to pay the bills, you should try to save enough to cover the costs of your deductible and the projected reduction in income while your status is deactivated.

• If you drive for a TNC as your only job, you may want to consider commercial coverage. The price is steep, usually $1,200 – $2,400 a year, but it comes with significantly higher limits to cover things like medical bills, attorney’s fees, and punitive damages.

• Save your receipts. Certain upgrades, like brand-new tires, a new engine or a killer stereo system, may not add to the cash value of your car. Save all documentation of improvements and additions just in case you need to prove how much you have put into your vehicle. Some of your enhancements might increase your collision claim.

• Don’t rely on your TNC to pay you everything you deserve. If you are injured in an accident caused by another driver while driving for Uber or Lyft, an experienced attorney can help ensure that you receive full compensation under the law for your injuries, pain and suffering.

• Since the passage of Assembly Bill 2293, California has specific rules and liability limits that differ from what’s immediately visible on both Uber’s and Lyft’s websites. For example, in California, your TNC’s liability coverage is your primary, not secondary, policy. For more information on what the State of California demands of your TNC’s insurance company, visit the TNC subpage on the CA.gov transportation page.

Watch YouTube Video: Uber/Lyft Insurance FACTS You Need to Know. The following video provides information on Uber and Lyft insurance that everyone needs to know before becoming a rideshare driver.

Here’s hoping all your trips are safe, enjoyable, and lucrative. Your services are in high demand and extremely valuable. Without you, people would still be dealing with the wait times, expense and inconvenience of taxi cabs, and too often people would take a chance driving after too many drinks or too little sleep. You have helped make trips easier and more affordable for passengers, and our shared roads safer for everyone.

Thank you for all you do.

I’m Ed Smith, an Uber and Lyft injury attorney in Sacramento.  Should you ever need help settling an injury claim involving your TNC or personal auto insurance, we invite you to call us. We’re here for you. Call us today at 916.921.6400 or (800) 404-5400 for free and friendly advice.