Jessica Sautter is a Content Writer for CarInsuranceCompanies.com with a Bachelor’s Degree from Eastern Michigan University in Elementary Education with a Major in Reading and a Minor in Mathematics.

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Chris Harrigan has an economic degree from Limestone College and an MBA from Clemson University. He previously managed auto insurance claims for Enterprise Rent-A-Car. Currently, he is using his business and insurance expertise to provide insurance data analysis and visualizations to enhance the user experience.

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Reviewed by Chris Harrigan
Former Auto Insurance Claims Manager

UPDATED: Aug 9, 2021

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Key takeaways...

  • Driving for Uber is a great way to earn extra money
  • Uber provides its drivers with generous auto insurance while working
  • You still need your own policy for when you drive for personal use
  • You can ensure the best deal on auto insurance by shopping around and reviewing your policy every six months

When driving for Uber, you need insurance to protect yourself and your passengers. Uber and other ride-sharing services like it count as commercial driving. The most important thing drivers should know is simple. Your personal auto insurance stops covering you as soon as you turn on the Uber app. While Uber does provide insurance at a cost, that insurance only kicks in when you have accepted and are on your way to or on a job. In the interim, when you are waiting to be assigned a job, neither covers your liability or personal property or medical costs. This leaves a significant gap in coverage that may end up costing full-time drivers thousands in even a small accident.

Uber’s insurance is not without its cost. Generally speaking, premiums are taken directly out of drivers’ pay, and drivers do not have the option to turn it off.

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What Should You Know about Driving for Uber?

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Driving for Uber is a great way to make extra money with your car. You can even earn a full-time living doing it in certain areas. Many people work part-time. Especially with their added service of Uber Eats, anyone can do it as long as they have the following:

  • a reliable car  (must have four doors and be 15 years or newer for rides)
  • a clean criminal record
  • a decent driving record
  • No bright/neon car colors associated with taxis or after market paint jobs
  • No passenger vehicle pickup trucks
  • No commercial branding or cosmetic damage

Once Uber approves you as a driver, you can start getting work through the Uber app. It’s easy. When you want to accept rides, you log into the app and set yourself as available. GPS technology matches you with nearby people who have requested rides.

You will get a notification of where to go when you’re assigned a job. Depending on the type of car you drive, you may qualify for higher rates for a “luxury experience.” Rides can be assigned both when you’re waiting and during another ride depending on who is closest when a customer requests a ride.

Even better, Uber has a rating system that works both ways. Your passengers can rate you on the app and future passengers can see your rating, but drivers can also rate passengers.

Rates are set ahead of time based on mileage and estimated time. For liability and other purposes, it’s recommended to have your passenger make changes in the app if they need to go further or be dropped off somewhere else.

The app tracks all of this information. You never have to track invoices or chase down payments. It’s all automatic. Uber isn’t perfect, but it makes driving for money convenient in many ways.

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What Insurance Do Uber Drivers Need?

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Uber covers its drivers with one million dollars in liability insurance and another one million in uninsured motorist coverage.

This coverage only applies while you’re on your way to or on a job with passengers. You still need to carry at least the minimum liability coverage on your personal insurance. If you’re financing your car, you will need to also carry collision and comprehensive insurance. When you’re relying on your car for income, this is generally best.

Available and Carrying Passengers

After an accident, when you contact Uber and try to make a claim through their policy, they’ll want to know two things.

  1. One, were you in “available” mode in the app?
  2. Two, were you actively carrying passengers when the crash happened?

If both answers are “yes,” you have the strongest chance of being covered by Uber’s policy.

The point of the policy is to protect drivers when their personal insurance doesn’t cover them – meaning when they’re driving for pay – and to protect passengers during their ride.

As previously mentioned, there’s a gap between Uber’s coverage and a standard personal auto insurance policy. This applies to Lyft drivers too. As soon as you turn on your driver app, your personal insurance coverage is off. Insurance from the company for Uber or Lyft drivers doesn’t kick on until you’re actually on a job. Even if you’re waiting for just a minute, a lot can happen in that minute.

Some drivers choose to carry a full commercial policy. Your personal auto insurance company will ask you if you drive for any kind of rideshare or delivery program. Depending on the company, they may refuse to cover you at all or significantly increase your rates. Full commercial insurance can drain your weekly rate.

The good news is some companies now offer gap insurance for rideshare drivers. For a relatively small fee compared to a commercial policy, you can add coverage that is active until Uber’s coverage turns on.

Just like rental costs and car costs, the premium will vary city to city. Depending partly on your personal miles, it could dramatically reduce your risk.

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Available, but Not Carrying Passengers

Uber covers its drivers with one million dollars in liability insurance and another one million in uninsured motorist. This coverage only applies while you’re on your way to or on a job with passengers. You still need to carry at least the minimum liability coverage on your personal insurance. If you’re financing your car, you will need to also carry collision and comprehensive insurance. When you’re relying on your car for income, this is generally best.

As previously mentioned, there’s a gap between Uber’s coverage and a standard personal auto insurance policy. This applies to Lyft drivers too. As soon as you turn on your driver app, your personal insurance coverage is off. Insurance from the company for Uber or Lyft drivers doesn’t kick on until you’re actually on a job. Even if you’re waiting for just a minute, a lot can happen in that minute.

Some drivers choose to carry a full commercial policy. Your personal auto insurance company will ask you if you drive for any kind of rideshare or delivery program. Depending on the company, they may refuse to cover you at all or significantly increase your rates. Full commercial insurance can drain your weekly rate.

The good news is some companies now offer gap insurance for rideshare drivers. For a relatively small fee compared to a commercial policy, you can add coverage that is active until Uber’s coverage turns on.

Just like rental costs and car costs, the premium will vary city to city. Depending partly on your personal miles, it could dramatically reduce your risk.

Are You Covered If You’re Not Available in The App?

It seems clear cut. If you’re driving or trying to drive for Uber, your personal insurance doesn’t cover an accident. What happens when you aren’t marked as available in the Uber app at the time of the accident? There’s no question here: your personal insurance coverage should pay. Some insurance companies may hesitate to cover you as long as the app was on unless you have the supplemental add on to cover the gap in coverage.

This situation is really no different than a truck driver parking their rig for the night, hopping into their personal vehicle, and heading home. You aren’t acting as an Uber representative when you aren’t available in the app, so you need your own policy to protect you in an accident.

Securing the Best Coverage

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As an Uber driver, you still need personal auto insurance to protect you when Uber’s policy doesn’t.

In fact, if you rely on Uber for income to make a living, you should consider upping your coverage and making sure you have comprehensive and collision coverage along with liability.

If you damage your car in an accident and you don’t have enough insurance to pay for all the damages, you could lose a source of income.

Increasing your coverage doesn’t necessarily mean making it prohibitively expensive. You can ensure you’re getting the best deal by shopping around between different carriers and reviewing your policy every six months.

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How Can You Find The Best Rates on Auto Insurance for Uber?

You shouldn’t ever accept the first car insurance quote you receive. You have no way of knowing if it’s the best available. Only when you compare several offers side by side can you get an idea which policy is best for you.

Take the time to do this comparison and you can be confident the policy you choose is best.

Try to review your policy every six months. It might have been the best available when you took it out. But that doesn’t always mean things are the same six months later.

Maybe your premiums jumped, or perhaps your coverage dropped. A competitor might have come along and introduced a better policy for your needs. Never renew your auto insurance without thoroughly reviewing it.

Driving for Uber is a convenient way to make extra money. But before taking the job, understand how car insurance works for Uber drivers and make sure you have enough to protect you and your vehicle.

Enter your zip code into our free car insurance comparison tool below!