Car Insurance for Gig Workers: Coverage, Types, and Health

Drivers for rideshare companies and food delivery services continue to be in high demand. Uber, Lyft, Doordash and Instacart are popular choices to earn extra money or a full-time income in the gig economy. If you drive for these companies, you need to ensure you have the right auto insurance so you have enough protection if you’re in an accident.

Figuring out your personal auto insurance policy can be confusing enough, and using your car for work and pleasure just makes it more complex.

Here’s a guide to navigating car insurance as a gig worker.

Table of Contents

• What is rideshare insurance?
• Car insurance options for gig workers
• Main things to know before buying rideshare insurance
• Requirements to buy rideshare insurance
• How much does rideshare insurance cost?
• Rideshare company coverage
• Food delivery company coverage
• Car insurance for gig workers coverage
• Car insurance for gig workers FAQs

What is rideshare insurance?

Rideshare insurance is a type of commercial car insurance that’s designed to fill the gap between your personal auto insurance policy and the policies offered by rideshare companies. This coverage gap typically exists when drivers have their app (e.g., Uber, Lyft, DoorDash) turned on but haven’t yet accepted a fare or delivery order.

While the rideshare and delivery companies provide some coverage in this scenario, they don’t typically provide collision or comprehensive insurance. That means your vehicle isn’t protected and your personal auto insurance policy won’t cover you either because you’re using your car for business.

Car insurance options for gig workers

There are typically three types of coverage to consider when you’re driving as a gig worker:

1. Your Personal Auto Insurance: This is your vehicle’s primary insurance policy. It’s what protects you while you’re driving it for personal use, such as going to work, hanging out with friends or running errands. It doesn't offer protection while you’re actively driving for rideshare or food delivery companies like Uber, Lyft and Doordash.
2. The Rideshare Company’s Insurance: The rideshare company provides a limited amount of coverage while you’re waiting for a ride or delivery request. The full coverage only kicks in when you’ve driving to an accepted fare, are carrying passengers or have accepted a delivery order.
3. Rideshare Insurance: Your personal auto insurance covers you when you're using your car for personal use, and the rideshare companies’ insurance only provides full coverage after you've accepted a job (i.e., accepted a fare, carrying passengers, delivering an order). Rideshare insurance covers the period in between and offers significantly higher coverage limits. It can also provide you with comprehensive and collision insurance while you are using the app and waiting for a ride or delivery order.

Main things to know before buying rideshare insurance

While rideshare insurance is important to have as a gig worker, you should know some key things before buying it.

• Limited providers: Rideshare insurance is only offered by a limited number of providers.

• State coverage: Not all insurers offer rideshare insurance in every state.

• Coverage limits: Rideshare insurance policies come with different coverage limits than traditional personal auto policies.

• Deductibles: Examine the cost and deductibles of the rideshare policy to find the one that best fits your needs.

• Premiums: Rideshare insurance costs vary significantly between carriers, so you want to compare prices before deciding.

• Required coverage: Most insurance companies require you to purchase rideshare insurance on top of your personal auto policy if you drive for a rideshare or delivery service.

• Standalone coverage: Only a few companies offer standalone rideshare insurance that isn’t an add-on to your existing personal auto policy. If your insurance company doesn’t offer rideshare insurance, you’ll either need to switch providers altogether or purchase a standalone policy from another company. In case you decide to move to a new insurance provider, read our detailed guide on how to cancel your car insurance for more information.

• Coverage details: Some policies only cover you when you’re waiting to accept a fare, while others provide that coverage and add additional coverage on top of the rideshare company's insurance during trips. Reading the fine print can help you understand what’s covered and when.

Aside from rideshare insurance, here are a few other types of relevant insurance for gig workers.

Gig worker disability insurance

Disability insurance helps replace income lost due to an injury or illness. As gig workers are independent contractors, they cannot access short-term or long-term employer-sponsored disability coverage.

The government provides disability benefits through Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI). To qualify for these programs, you must meet its disability requirements. While a private disability insurance policy can help provide coverage for gig workers, these plans may be prohibitively expensive for some. They also vary widely in their maximum monthly benefit payouts, waiting periods and eligibility requirements. You should carefully consider all of these factors before making a decision.

Health insurance for gig workers

Similar to disability insurance, health insurance is an important safety net that's not available to independent contractors and freelancers from the companies they work with. As such, gig workers must purchase their own health insurance plans directly through a private insurer or the Affordable Care Act (ACA) marketplace. In some states, they may be eligible for subsidized health coverage that significantly lowers the monthly premium depending on their income, family size, and other factors.

Unemployment insurance

Generally, gig workers aren’t eligible for unemployment benefits because they’re self-employed. This means they don’t qualify for the state benefits provided to traditional employees. In recent years, a few companies have started providing private unemployment insurance to gig workers, offering limited income protection in case of job loss.

Requirements to buy rideshare insurance

The requirements to buy car insurance and rideshare insurance are similar. You may have to provide your driver's license information, make, model and age of your vehicle, and any other specific information requested by the insurance provider. Although states don't have legal requirements to purchase rideshare insurance, some car insurance companies may require it if you work with companies like Uber and Lyft. The exact requirements will vary by insurer and state, so check with your provider for details.

How much does rideshare insurance cost?

The average cost for rideshare insurance depends on several factors, including your driving history, your vehicle and where you live. Generally speaking, the cost will range from as little as 0.90 cents per day to an additional 15% to 20% on top of your personal car insurance premium. Rates can vary significantly between states and insurers, so be sure to shop around for the best deals if you're looking for cheap car insurance.

Rideshare company coverage

The biggest rideshare companies provide drivers with some company sponsored coverage. Uber and Lyft maintain auto insurance on your behalf. It’s subject to certain limits, deductibles, and state requirements, when you’re waiting for a ride request and carrying passengers or en route to a pickup. The following tables show the coverage provided to drivers by Uber and Lyft.

Uber

It’s important to note that Uber’s contingent comprehensive and collision insurance only applies if the driver maintains comprehensive and collision on their personal auto insurance policy. If applicable, this insurance policy goes toward vehicle repairs or car replacement up to its actual cash value after paying a $2,500 deductible ($1,000 for certain vehicles under Uber’s insurance policy).

Aside from the coverage described above, Uber also offers optional policies for driver injury protection. This provides benefits for medical expenses, disability, loss of life and dismemberment. It applies both when drivers are actively engaged in a ride (en route to pick up or with passengers in the vehicle) as well as when drivers are online waiting for trip requests.

Uber’s injury protection insurance is currently offered in all states with a monthly premium priced at $0.024 per mile (miles only charged when on-trip). Drivers in California receive this protection for free, as the state requires Uber pay for the protection.

Lyft

Lyft's contingent comprehensive and collision insurance is similar to Uber’s policies. Those coverages only apply if the driver maintains them on their personal auto policy and come with a $2,500 deductible. Lyft says it may also provide first-party coverages such as medical payments or personal injury protection, though availability and coverage limits vary by state.

Food delivery company coverage

While rideshare companies generally offer commercial coverage, that’s not always the case if you’re delivering goods. Some, but not all, commercial delivery companies maintain a commercial auto liability policy to cover drivers while on the job, but limits and exceptions apply.

Instacart, for example, says in its shopper contract that it doesn’t provide insurance to its drivers. Meanwhile, a few national delivery companies — such as Amazon Flex, UberEats and DoorDash — maintain commercial auto insurance on behalf of their drivers, but coverage can depend on the state. Also, you may need to make a claim on your personal policy first, and coverage limits and exceptions may apply. The table below explores the coverage currently offered by some of the most popular delivery gig companies.

It’s unlikely you'll have any company coverage if you drive for a local restaurant, grocery store, or other retailer. But you may have coverage through your personal insurance policy, at least for the time being. During the pandemic, many national and regional auto insurers temporarily extended personal auto coverage for their customers who took delivery jobs for groceries, pharmacies, restaurants and medical supplies, says Mark Friedlander, director of corporate communications for the Insurance Information Institute.

If you work for types of companies, Friedlander advises asking your carrier if they offer a pandemic exception on your personal policy because some of these programs may have ended by now. Understand, too, that the pandemic exception, even when applicable, works for local businesses, not commercial delivery businesses such as Amazon, UberEats, or DoorDash.

Car insurance for gig workers coverage

While rideshare insurance will cover certain gaps in coverage, the specifics of rideshare policies from different insurers vary in what they actually cover. To make matters even more confusing, policies from a single insurer can vary depending on the state. The following table compares what the rideshare policies of some major providers cover in most states.

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