How to insure a vehicle for rideshare driving

Driving for a rideshare or delivery platform turns a personal car into a vehicle used for hire, and the standard personal auto policy was not written for that. Nearly every personal policy contains a public or livery conveyance exclusion, and many carriers have added language that removes coverage from the moment the driver logs into a transportation network app. The platform carries insurance of its own, and Arizona, Nevada, Utah and Idaho each have transportation network company laws that set out what must be in place during each phase of the work. Between those two layers there is usually a gap, and it falls in exactly the hours a new driver assumes are covered.

This guide explains the phases, what each layer pays in them, how to close the gap with the right endorsement or policy, and what to check before the first shift.

How the driving periods divide the risk

Rideshare insurance is organised around what the driver is doing at the time of the loss. The insurance industry commonly describes these as periods.

• App off. The car is a personal vehicle. The personal auto policy applies as usual, and the platform's coverage does not.
• App on, waiting for a request. The driver is available for hire but has no passenger. Personal policies commonly exclude this period. The platform's coverage applies at reduced liability limits set by state law, which in Arizona the Department of Insurance and Financial Institutions can confirm, and usually provides no collision or comprehensive for the driver's own car.
• Request accepted, driving to the pickup. The platform's higher liability limits generally apply, and contingent physical damage coverage may apply with a high deductible if the driver carries collision on the personal policy.
• Passenger in the car. The platform's full coverage applies, including uninsured motorist coverage in some states, until the ride ends.

What to gather

The carrier will ask about the work, and the answers decide which product fits.

• The name of every platform you will drive for, and whether the work is rides, food or package delivery, or both.
• The platform's current insurance summary for your state, which it publishes to drivers, showing the liability limits and the physical damage deductible in each period.
• Your current declarations page, with liability limits, collision and comprehensive, and any lienholder or lessor.
• Your lease or loan agreement, since some lessors restrict commercial use of the vehicle.
• An estimate of weekly hours logged in, and whether anyone else in the household will drive the car for the platform.

Step one: tell your carrier before the first shift

Call the carrier or agent and say plainly that you intend to drive for a transportation network company. Reading the exclusion yourself is a start, but carriers word it differently, and some will non-renew a policy when they learn of undisclosed rideshare use after a claim. Disclosure before the first shift turns a potential rescission into an underwriting question with an answer.

The carrier will give one of three answers: it offers a rideshare endorsement on the personal policy; it does not, but will continue the personal policy for personal use while you buy rideshare coverage elsewhere; or it will not insure a vehicle used for rideshare at all. The third answer means moving the whole car to a carrier that does.

Step two: add the endorsement or the hybrid policy

A rideshare endorsement extends the personal policy into the app-on waiting period, and often into the later periods as excess over the platform's coverage. What it extends matters. Some endorsements extend only liability; better ones extend the driver's own collision and comprehensive, rental reimbursement and medical coverage into that waiting period, and some cover the platform's high physical damage deductible in the later periods. Ask the carrier to state, in writing or on the endorsement form, which coverages apply in each period.

Where no endorsement is available, some carriers sell a hybrid policy written to cover personal and rideshare use together. Full-time drivers, particularly those who lease a vehicle through a platform programme or drive a larger vehicle for black-car service, may need a commercial auto policy instead, which is rated for hire from the start.

In Utah, where personal injury protection pays the insured's own medical bills regardless of fault, check that the rideshare endorsement or the platform's coverage provides that benefit during each period. In Arizona, Nevada and Idaho, check medical payments coverage the same way.

Step three: close the gaps that remain

With the endorsement in place, compare it to the platform's summary one period at a time and look for what is still missing. The platform's physical damage coverage is usually contingent on the driver carrying collision and comprehensive personally, so dropping collision on an older car to save premium can also remove the platform's damage coverage in the later periods. If the car is financed, gap coverage from the lender or carrier may not apply during commercial use; confirm it. If a household member will also drive the car for the platform, both drivers need to be listed and both need to be approved by the platform.

Then think about income. If the car is off the road for two weeks after an accident, neither the platform nor a standard endorsement replaces lost fares. Rental reimbursement helps only if it applies to rideshare use. Drivers who depend on the income should ask whether the endorsement's rental coverage can be used to keep driving.

Common mistakes

Each of these tends to surface after an accident, when it is too late to correct.

• Assuming the platform's coverage applies whenever the app is open. The waiting period carries lower limits and often no damage coverage for your car.
• Not telling the personal carrier, then having a claim denied and the policy non-renewed.
• Dropping collision to save money, which can void the platform's contingent damage coverage.
• Buying an endorsement that extends liability only, without checking the driver's own car and injuries.
• Driving a leased vehicle for hire when the lease prohibits it.
• Adding delivery work to rideshare work without asking whether the endorsement covers both.

A worked example

Suppose a driver in Las Vegas has the app open and is waiting for a request when he rear-ends another car at a light. The other driver's repairs come to $8,000 and his own car needs $5,000. His personal policy excludes the waiting period. The platform's coverage in that period pays the other driver's $8,000 under its liability, but it provides no damage coverage for his car, so the $5,000 is his. Now suppose instead he had added a rideshare endorsement for $15 a month that extends his collision coverage into the waiting period with his usual $500 deductible: his carrier pays $4,500, and his cost is the deductible and the endorsement premium, $180 for the year. The figures are illustrative; the point is that the waiting period is where the uncovered loss sits.

How to use this

Before the first shift, send us your declarations page and the platforms you plan to drive for, and we will tell you what your current policy does in each period and compare endorsement, hybrid and commercial options across the carriers we represent in Arizona, Nevada, Utah and Idaho. If you drive only occasionally and your carrier's endorsement already closes the gap, keeping it as it is may be the answer.