How Does Car Insurance Work With Uber And Lyft?
How Does Car Insurance Work With Uber And Lyft?
New age taxi services like Uber and Lyft are growing increasingly popular in cities across America. Uber is now available in over 100 cities in the United States and is regularly adding more cities to its scope of areas-served. Lyft can be acquired in nearly just as numerous places.
The reason why these ride sharing services are expanding so rapidly is because they offer lower cost, more convenient alternatives to your traditional taxi or yellow cab. All one needs to complete to get a ride using them would be to download their mobile app and then tap on the button to have catch a ride.
Many individuals are lured to Uber and Lyft due to the many promotions they offer. Referring a friend to the service can get you a free of charge ride or a substantial coupon. Without the coupons, these new car hire services are still a much cheaper option than your traditional taxi. Being so inexpensive does feature a cost, however, and many folks are worried about whether or not Uber and Lyft drivers have sufficient insurance.
Below, we will try and help you understand more about Uber's and Lyft's ridesharing insurance options, how they work, and whether you should obtain a supplemental insurance plan if you choose to drive for them.
Does The Company Provide Insurance Or Does The Driver Provide Insurance?
Uber and Lyft require all of their drivers to have an active insurance policy when they're driving. Not only is driving without insurance against company policy, it can be against regulations to drive without insurance in all 50 states.
The problem that is associated with insuring in Uber or Lyft driver is whether or not to classify it as commercial insurance. The vehicles driven by these drivers are used both for business and pleasure. When they are not driving customers, they're often driving around going about their daily lives – doing errands, commuting for their job, etc. Furthermore, the vehicles are owned not by Uber or Lyft but alternatively the taxi driver himself.
Personal auto insurance policies often do not cover business use of a vehicle. Commercial auto insurance polices tend to be much more expensive than personal auto insurance policies, and usually come with the stipulation that the vehicle is to be useful for business purposes only.
What complicates things even further is the truth that ride-sharing companies are reluctant to take responsibility for insurance liability. Uber and Lyft have their particular supplemental insurance that they give to drivers to cover them when they have customers within their cars. Quite often, however, this coverage isn't sufficient. For example, while driving for Uber, you are covered by their insurance, but when you are driving around trolling for passengers, you are not. The issue is, when you are looking for customers, your own personal policy will not cover you, as this is a business practice.
Getting Insurance As An Uber or Lyft Driver
Luckily, for Uber and Lyft drivers, more and more insurance companies are offering insurance to ride share drivers.As more and more folks turn to Uber and Lyft for part time or full time work, insurance companies are starting to appreciate that their traditional policies are not up-with-the-times (as most driver's secretly rely on the personal policies for coverage). Because of this, an increasing number of insurance companies are starting to produce ridesharing or hybrid products to cover their drivers. As of January 2016, many major insurers like GEICO, Progressive, Farmers, and Allstate are already offering products for ridesharing.
Because of confusion concerning the insurance aspect, many drivers end up committing insurance fraud without even realizing what they're doing. A reported 92% of drivers for these services do not tell their insurance companies about their little side-business. 72% of drivers are not even sure what coverage is offered by Uber and Lyft. These drivers could possibly be setting themselves up for real trouble in the future when they get into an auto accident. If you're planning to begin driving for Uber or Lyft, you need to first contact them to learn your very best selection for insurance. If you should be buying your own insurance plan and are looking for ways to save lots of money,
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