The single most important thing to remember is that rideshare drivers need to carefully review their insurance policies to ensure they have adequate coverage when working for a rideshare company.
70% of rideshare drivers in the United States are not adequately insured. Period. This staggering number is a result of insurance gaps that exist in the rideshare industry, leaving drivers vulnerable to financial losses in the event of an accident.
What Are Rideshare Insurance Gaps? Insurance gaps occur when a driver is not covered by their personal insurance policy or the rideshare company's insurance policy. Normally, personal insurance policies do not cover drivers when they are working for a rideshare company. For example, in Chicago, a driver's personal insurance policy may not cover them when they are logged into the Uber app and waiting for a ride request.
How Do Rideshare Insurance Gaps Affect Drivers in Los Angeles? Los Angeles has some of the highest insurance rates in the country, making it difficult for drivers to afford adequate coverage. Drivers in Los Angeles can expect to pay around $2,500 per year for a personal insurance policy that covers them when they are not working for a rideshare company. However, this policy will not cover them when they are logged into the Lyft app and picking up passengers.
What Is the Cost of Rideshare Insurance Gaps in Chicago? The cost of insurance gaps in Chicago can be significant, with drivers facing out-of-pocket expenses of up to $10,000 in the event of an accident. In Chicago, the average cost of a car accident is around $7,500, with insurance gaps leaving drivers responsible for around 30% of this cost. For example, if a driver is involved in an accident while working for Uber in Chicago, they may be responsible for paying around $2,250 out of pocket.
Can Rideshare Drivers in Toronto Afford
the Coverage They Need? Toronto has a unique insurance market, with drivers able to purchase specialized rideshare insurance policies that cover them when they are working for a rideshare company. These policies can cost around $1,500 per year, which is significantly lower than the cost of a personal insurance policy in Los Angeles. However, even with these specialized policies, drivers in Toronto may still face insurance gaps, particularly when they are logged into the Uber app but have not yet accepted a ride request.
Challenging the Assumption That Rideshare Companies Provide Adequate Insurance Many drivers assume that rideshare companies provide adequate insurance coverage, but this is not always the case. In London, for example, Uber's insurance policy only covers drivers when they are on their way to pick up a passenger or have a passenger in the car. If a driver is logged into the app but has not yet accepted a ride request, they may not be covered by Uber's insurance policy, leaving them vulnerable to financial losses in the event of an accident.
How Do Insurance Gaps Affect Rideshare Drivers in the United States? Insurance gaps affect rideshare drivers across the United States, with drivers in different cities facing unique challenges. In the United States, around 40% of rideshare drivers are not covered by their personal insurance policy or the rideshare company's insurance policy. This can leave drivers facing significant out-of-pocket expenses in the event of an accident, with the average cost of a car accident in the United States around $8,000.
Take action today by reviewing your insurance policy and ensuring you have adequate coverage when working for a rideshare company.
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Sandra is a licensed insurance broker with 11 years of experience helping small and mid-size businesses find the right liability coverage. She has worked with clients in New York, Chicago, London, and Toronto across industries from tech startups to food and beverage. She writes to cut through the jargon and help business owners make smart coverage decisions.
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