Want to Drive for Uber or DoorDash?

Uber and Lyft are now more than just convenient rideshare apps. Delivery apps like Uber Eats, Grubhub, and DoorDash make ordering easy for customers, but insurance coverage can be confusing for drivers. Here are some things to consider before joining a company as a rideshare or delivery employee.

Am I Covered?

Rideshare and delivery companies promote themselves as simply the facilitator of these types of transactions. The companies do not own the cars and drivers are subcontractors not employees. Some states are enacting legislation to regulate these entities and it’s creating problems for insurance companies and drivers.

Both Uber and Lyft offer insurance to their drivers and passengers, but it isn’t as simple as just saying you are, or are not covered. Lyft offers contingent coverage, while Uber relies on third-party policies. The details are complicated, especially with varying state laws and regulations. Keep in mind that these regulations and coverages vary by state, as well. If you’re considering joining a delivery or rideshare organization, do your homework.

Personal auto policies generally don’t cover you when you’re driving passengers for pay. Uber and Lyft add commercial coverage while someone’s in your car, but that protection isn’t complete.

So, what about before and after a drive?

Transaction Periods

Driving for a Transportation Network Company (TNC) like Uber or Lyft turns your car into a commercial vehicle. You’re using it to transport passengers or make deliveries for a fee, which a personal auto policy excludes. Just because Uber says they have a policy that will cover you does not mean much. You have to dig deeper into that contract.

TNC transactions have 3 periods:

• The app is turned off – personal insurance coverage applies.
• The app is turned on and the driver is waiting for a fare or delivery.
• The driver has accepted a fare and is en route or in process of completing a trip.

Typically a TNC provides coverage for periods 2 and 3, but not period 1. If you have an accident during period one, your personal auto may not respond, and neither will the TNC coverage. Some companies are developing special endorsements to provide coverage during this period for an additional fee, while others are not taking on this exposure and are beefing up their policy exclusions.

Before you decide to work for a TNC, do your homework – call your agent to find out how your company deals with the TNC exposure. Also get a copy of the contract with the TNC that shows the periods when the TNC provides coverage as well as what limits and deductibles their policy includes. In many cases their deductibles are $2,500 or more.

Could I Get A Commercial Auto Policy?

Commercial auto policies are one way to resolve these problems, but unless you are planning on doing a lot of driving, this probably is not a financially feasible idea. A full coverage commercial auto policy for someone driving for livery purposes could easily exceed $2000 per year – that’s a lot of cost to assume, especially if you are only driving for Uber or Lyft on a part-time basis. Also, as of now there are only very few companies that are willing to offer that coverage, meaning rate shopping is not always an option.

Currently, much of the burden lies with the drivers, and potentially puts the driver in a situation where they have little to gain and a lot to lose (personal assets and future earnings). Until states set guidelines and pass laws to regulate entities such as Uber and Lyft, we are at a stand still.

Some insurance companies offer rideshare endorsements that you can add to your insurance policy for additional protection. If you are currently a TNC employee or are considering employment through one of these companies, give us a call to explore your options.

Updated October 12, 2025