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Guide to Ride Sharing Insurance

Feb 18, 2021 6 minute read

Guide to Ride Sharing Insurance

In Canada, the emergence of ridesharing apps such as Uber and Lyft has become a huge, disruptive business. Hailing and securing a ride is as easy as a few taps on your phone. Not only are these services making it easier to be a rider, but also a driver! Almost anyone with a car can become a rideshare driver.

If you’re interested in earning income through ride sharing, you probably have some questions about your insurance! In this article, we’ll share the basics of ride sharing, how the insurance works, and what you’ll need to do to make sure you have the right coverage.

What Is Ridesharing?

According to Wikipedia, ridesharing is an arrangement that matches passengers with drivers of vehicles for hire. Ridesharing is usually arranged via a website or mobile app. Customers enter their specific pick-up and drop-off locations, and a vehicle will pick them up within a block or two of their doorstep or a nearby location.

Although you can pay more for your own private rideshare experience, you can also arrange for a shared rideshare trip through your mobile app. These rides generally take a bit more time, as there are more stops to make. However, all passengers of the ride share the total ride cost, making the price cheaper. The car owner themselves also tends to save on fuel costs.

There are many different ride share companies available to consumers in Canada. However, the two most popular ones are Uber and Lyft.

What Does Ridesharing Insurance Cover?

Each ridesharing company is different. Before you start driving, be sure you understand your rights and responsibilities as a driver.

Uber and Lyft have commercial insurance plans that will cover you if you are involved in an accident while driving for their platforms. That means if you are involved in an accident while driving for Uber or Lyft, you will be covered under their policy.

Some of the things you may be covered for include:

It’s important you also have your own personal insurance policy as well. If you are involved in an accident while you’re not working for the rideshare company, your own insurance would kick in.

It’s important you tell your personal insurance company if you start driving for a rideshare company. Ridesharing doesn’t necessarily mean your rates will increase. It’s important to be honest and open with your insurance broker and let them know if you start driving for a company such as Uber or Lyft.

Ridesharing Insurance Eligibility

Just like any other insurance policy, there are some criteria one must meet in order to qualify for a ride-sharing insurance policy. This criteria includes the following:

  • You must have a valid driver’s license
  • You cannot use your vehicle for other commercial purposes (deliveries, transporting finished goods, towing, etc.) while driving for a rideshare company.
  • Some ridesharing companies limit the amount of hours per week you can drive. If you drive more than the allowed hours, you might not be covered by their insurance.
  • Only the driver who is listed on the ride sharing policy can transport passengers for pay.
  • Some rideshare companies limit the amount of rideshare drivers in a household.
  • Certain makes and models of vehicles are not eligible for ridesharing insurance, including large vans, buses and limousines.

The Importance of Ridesharing Insurance

The law requires rideshare companies to provide insurance for their drivers. However, most of these are the most basic policies available, and will not cover you in every circumstance that you may find yourself in. This is why insurers offer a ridesharing insurance endorsement that you can add to your existing personal auto insurance plan in order to provide you with extra layers of coverage. If you drive for a ridesharing company, the additional coverage offered by this endorsement can help bridge the gap between the company’s commercial policy and your personal insurance policy.

Get the Right Ridesharing Insurance Coverage for Your Car

If you are a rideshare driver for Uber or Lyft, the commercial coverage offered might not be enough. Make sure you’re fully covered by contacting an experienced insurance broker from BrokerLink.

Here at BrokerLink, our brokers are experts when it comes to insurance. We can answer all your questions about ridesharing insurance and we’ll make sure you have the exact coverage you need. If you are interested in learning more about car insurance, or even just your insurance options in general, we’re here to help!

It’s easy to get in touch with us!

Guide to Ridesharing Insurance FAQs

If I'm already covered by Uber and I already have personal auto insurance, why would I need additional ridesharing insurance?

Most rideshare companies offer very limited insurance, which will not protect you in all cases. That is why it is important for you to also invest in your own rideshare insurance policy. This way, you will have extra layers of protection and coverage while driving while on the you’re your personal auto insurance also will not kick in to cover you, as driving for a rideshare company is considered a “commercial” activity. Without a rideshare insurance policy, you may end up falling into coverage gaps for accidents that occur while you're ridesharing, and/or paying out of pocket for repairs or injuries.

Can I get my ridesharing insurance as an add-on to my auto insurance?

Yes you can! Most insurance companies offer an endorsement that you can add to your existing personal auto insurance plan, in order to provide you with extra layers of coverage. If you drive for a ridesharing company, the additional coverage offered by this endorsement can help bridge the gap between the commercial policy and your personal insurance policy. Speak with a broker today to find out more information regarding this type of endorsement.

Does my ridesharing insurance have a limit to how many kilometers I can drive?

Some rideshare companies have specific limitations on their policies. One common limitation is that you cannot use your vehicle for ride sharing for more than a maximum number of hours per day. That is why it is important to read your rideshare insurance policy carefully, to see what limitations are outlined to you. These limitations may only apply to certain companies and apps. If you would like some more clarification regarding your rideshare insurance policy, please speak to a broker. We would be happy to help.