We now live in a world where we share almost everything with everyone. From pictures of our new vegan recipes, to videos of our marriage proposals, to news of landing that dream job. Of course it was only a matter of time before we started sharing our personal cars. Ridesharing is the latest, and to me personally, one of the greatest tools that can be used to travel safely, but also generate consistent or additional income.

So You’re Ready to Get in the Driver’s Seat

Yes, ridesharing is great, but it can come with tons of liability to the driver. What coverages and packages each insurance company offers often varies by state according to each state’s laws and risk factors. For instance, Progressive has rolled out their new rideshare insurance product in a few states, but not yet Louisiana; most likely due to Louisiana being a high risk auto insurance state. Trust me, by being an agent and living in New Orleans, I’ve felt the effects of being classified as high risk first hand. In order to limit this risk and protect yourself and your vehicle there’s some key components to remember when it comes to deciding to become a rideshare driver.

Notify. First and foremost, notify your personal auto insurance carrier that you will be participating in ridesharing services. Don’t lie to your agent!If you do not notify them and find yourself in an accident the insurance company will either deny the claim or likely pay the claim and drop you just for participating in ride share services. This is easily an exclusion on a personal auto policy under the Public or Livery Conveyance clause and will make it more difficult and expensive to find insurance elsewhere.

2. Be aware of the Gap. The Gap occurs the moment you turn the app on. When your ride sharing service is on your personal auto insurance is immediately suspended. Some services like uber will provide you with limited liability during the period when the driver is waiting for a request. This will only cover the other driver and vehicle in the event that you hit someone or something, not your vehicle or medical expenses. How do we cover this gap? With either a hybrid policy or remaining parked during phase 1, which many drivers find unrealistic and limiting.

Now let’s talk about when the ridesharing company will cover you. This is broken down into three phases:

Phase 1. When the app is on and the driver is waiting for a request.

Phase 2. When the driver is in route to a passenger.

Phase 3. When a passenger is in the car.

During phase 1 the rideshare company will offer liability only, leaving the driver liable to cover the damages to their own car and injuries. Phases 2 and 3 are essentially all of the components of a full commercial coverage policy, but the deductibles for this coverage can be much higher than what your personal auto policy entails. Remember, when you are not in these 3 phases the ridesharing company will not cover any offline damages.

Most companies now offer different hybrid rideshare policies that combine both personal auto coverage and rideshare insurance coverage. This package does not apply to taxis, limos, buses, etc. because they require specific commercial insurance coverage. As an insurance agent I’m a fan of hybrid policies because it leaves the driver without a lapse in coverage while switching between a ridesharing policy and standard personal auto policy for only $15-$20 extra a month.

Unfortunately, in Louisiana, hybrid packages have been limited to just a few companies.

What makes Ridesharing different from a Taxi service?

Because ridesharing is fairly new it’s generally unregulated compared to taxis as our government is just learning to standardize ridesharing regulations. This has inevitably caused a rift between the two industries when dealing with a consumer base that is literally hooked to their phones and ease of access. I for sure am one of them. Although ridesharing is rather unregulated, the requirements for drivers are often stricter such as driving history requirements and the ability to track their drivers en route. It’s also a great bonus that rideshare drivers are rated so they typically take extra care to make sure rides are pleasant, whether that be cleanliness or personality. The central difference is the amount of insurance coverage is required for the different vehicles. Taxi’s require commercial licenses and insurance which can get complex and expensive depending on the type of vehicle and driver history making ridesharing even more appealing.

No matter what your rideshare company of choice may be, it is vital to stay up to date with the changes in both the insurance and rideshare industries. Swanson strives to adequately assist in protecting yourself and vehicle from unwanted liability.

Ridesharing: How to Make Sure You're Insured