The rideshare industry can provide valuable gig income. Before you choose this path though, there are many things you should consider, not the least of which is insurance coverage.

Often debated is whether rideshare gigs really make any bottom line income. The wear and tear on cars can eat profits. Less talked about is the quandary of protecting yourself with the right insurance. To the rideshare industry’s credit, protections for drivers via liability insurance coverage has made good strides. But there are pitfalls and risks that remain. 

You will to be sued individually along with the rideshare company in an at fault accident. Especially ones that injure passengers or third parties. Since you are holding yourself out as a professional driver, you will be held to a higher standard than the average driver, increasing your financial risk.

Your personal auto insurance does not cover you, it ends when you log into the rideshare company platform. The only protection you have is the rideshare companies coverage. They provide two levels of coverage, 1) waiting for an assignment and 2) when you get one. Waiting coverage has small limits of $50,000/$100,000 per accident and $25,000 property damage to third parties. Once you get the assignment, most offer higher $1,000,000 combined single limit liability coverage. 

Some insurers such as Farmers or State Farm offer rideshare gap coverage providing higher limits during the “waiting period.” No additional coverage is provided after you get the assignment. 

$1,000,000 sounds like a lot of coverage, especially when most injury claims are under $50,000. However, claims can run into the millions. Additionally, you are entirely dependent on the companies insurance not your own. They will settle claims in a manner that is of best interest to them. Then there is always the question of covering damage incurred to your car.

The only way around all this is to obtain commercial driver coverage. It is expensive ranging from $1,500 to $5,000. Limits for this coverage can also be low.

In the important area of insurance, there is not a perfect answer. When you consider driving for a rideshare company, you need to evaluate how much you want to risk and your financial situation. If you have personal assets, they could be gone in a flash in a large settlement. 

So it’s a rideshare if you dare decision. 


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