If you’re any driver, having auto insurance coverage is a must. This is especially true if you’re a rideshare driver.
Lyft and Uber are only going to cover you part of the time. And unfortunately, some insurance companies won’t provide you coverage if you’re a rideshare driver.
Plus, whether you’re a rideshare driver or not, an accident is just a matter of “when,†not an “if.†Statistically, you’re going to be in one every 18 years.
Well, today, we’re going to talk about all things insurance – related to driving, of course – starting with rideshare insurance down to the basic auto insurance suitable for different kinds of drivers in the US.
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So, what is rideshare insurance and why would you need it?
If you are a Rideshare driver, you already know that Uber and Lyft insurance covers you for Periods 2 and 3. Period 2 begins when you accept a ride request and go to meet the passenger.
Period 3 starts when the passenger gets into the car and ends when you drop him off. Period 1, which has no collision coverage and low liability limits, is when you’re online but have no request.
Obviously, you’re going to be at most risk during Period 1 since that is where you lack coverage. This is where rideshare insurance comes in.
Rideshare insurance covers you during Period 1. Some policies will include coverage for Periods 2 and 3 as well.
This is great because the deductible for Uber’s collision coverage is $1000, while Lyft’s deductible for the same coverage is $2500. That is, if your rideshare insurance policy has a lower deductible.
Do I still need auto insurance?
Yes, you will still need personal auto insurance because your rideshare insurance only covers those times when you are online in the app.
The rest of the time that you are not driving around for Uber, Lyft, or some other rideshare program will not be covered. And that’s not all.
Personal auto insurance will differ based on the type of driver you are – US citizen, US resident, tourist, and, yes, even rideshare drivers.
Not to mention, the minimum liability coverage will differ depending on your state. Whatever type of driver you are and wherever you’ll be driving, you’re always going to need auto insurance.
This is because the law requires that a vehicle driven on US roads must be insured.
US Citizen Driver
For US citizens, getting auto insurance isn’t a picnic. But it’s definitely a lot easier than other types of drivers such as US residents and tourists.
The first step to getting the right coverage is to check what is required in your state and list down what you want your insurance to cover, how much you want to pay, and how much you want to be able to get when you file a claim.
You’re going to need to check the average rates in your area (easily checked online) because they vary depending on your specific location.
The best thing you can do to ensure you’ve got the best coverage possible is to drive a hard bargain. Make sure to shop around for the best coverage and rates. Make comparisons and ask insurance companies if they can give you something better.
Don’t be afraid to ask for discounts, which can lead to maximum savings. And do all of this once every 6 months to a year because rates change; insurance companies utilize their own formula when calculating their rates, so it’s best to always be on the lookout.
Non-US Citizen Drivers
Every year, hundreds of thousands of people visit the United States. They may stay for a short vacation or for a lot longer. However long their stay is in the US, they will need some car insurance if they plan on driving.
Whether you’re renting a car, borrowing one from a family member or friend, or buying one for your personal use, the law requires that the vehicle has enough coverage to be driven on the US road system.
Even drivers coming into the US using their own vehicle (from Mexico and Canada) will need an insurance policy that includes coverage inside the US. Take note that the type of coverage for US citizens and non-US citizens won’t differ much.
You’ll need liability, personal injury protection, and maybe collision coverage, at the very least.
There are a few ways for a non-US citizen to obtain auto insurance. You can get it from a rental company that will handle the insurance requirements before you even rent the car. Some credit card companies do provide rental car insurance, but you’ll need to check its primary coverage or secondary coverage.
If you’re borrowing a car from a family member or friend, you’ll need to check the type of coverage that the owner has on the vehicle.
Full coverage insurance typically means that you’re safe to drive the vehicle. Insurance policies that only meet the minimum requirements of the state may not be enough.
To ensure that you’re secured, you might want to ask the policyholder to add a temporary additional driver to his policy for your benefit.
Non-US citizens can also obtain an auto insurance policy directly from a provider. Take note that not all insurance companies will be open to providing policies to foreign drivers.
After all, they rely on a person’s driving history and credit history to determine the rate they’ll offer. These types of information are unavailable for foreign drivers.
Some insurance companies will offer a policy, but you’ll need to pay through the nose. Others will require you to get a US driver’s license, which is a slow process.
It’s best to navigate through all of this if you consult with local experts, such as independent auto insurance agents.