Lyft insurance explained

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While driving for Lyft can be a great way to pick up some extra money, there is one thing you need to do before picking up your first passenger: Make sure you are fully protected if you are in an accident.

If you don’t have a clear understanding of Lyft insurance, you could be left holding the bag.

While Lyft does offer liability coverage, it is only part-time, contingent coverage, and collision/comprehensive apply only if you also carry them on your personal policy. Yet most personal policies specifically exclude ridesharing coverage, leaving you exposed.

Lyft-friendly policies do exist – but you may have to work to find one.

Ridesharing and insurance

According to insurers there are three “periods” when it comes to ridesharing.

If you have an accident, proof of coverage from your personal policy should be adequate.

The truth is, the more time you spend on the road, the more likely you are to have an accident, and when that happens you will want to know which (if any) insurance company is going to pick up the tab.

What Lyft’s insurance covers

Lyft carries liability coverage for its drivers, but the coverage levels depend on whether there is a passenger in the car. Collision and comprehension only available only to drivers who already have these coverages on their own policies, and your injuries are only covered if the other driver is at fault.

Here is a quick look at what Lyft insurance covers:

Period 1: Liability limits are low and comprehensive and collision coverage are not offered.

California and Maine have different laws for Period 1. In these two states personal insurance policies do not apply at all during period 1. This means that Lyft drivers must carry a commercial livery policy or a policy with a rideshare endorsement. If the driver has neither, Lyft’s contingent liability will have to step up, but again, the limits are low.

Periods 2 and 3: Liability is coverage is plentiful, but collision and comprehensive is only contingent.

While Lyft will overlook small dings and scratches, if you have a huge dent, you will not be cleared to drive until the vehicle is repaired.

What insurance do I need?

Carry these three types of insurance on your personal policy, as well as a rideshare endorsement, if you decide to drive for Lyft or any other ridesharing company. There are also a couple other coverages that you should consider.

Liability: Every state in the country requires drivers to carry liability insurance. Required coverage levels vary. Liability covers injuries to another person or damage to their property due to an accident caused by you. Liability does not protect your own car or cover any of your medical costs. Most experts recommend carrying 100/300/50 – that’s $100,000 per person for injuries, up to $300,000 per accident, and $50,000 for property damage. Additional liability coverage is usually pretty affordable.

Collision/comprehensive: State law never requires collision and comprehensive, but if you have a loan on your vehicle, the lender will require these coverages. Collision pays to repair or replace your vehicle if it is damaged in an accident with another vehicle or stationary object, even if you are at fault. Comprehensive covers theft and damage from hail, fire, vandalism or collision with an animal. Unless you can easily afford another car, you should never be out on the road without collision and comprehensive. Remember, if you have to use Lyft’s coverage, its deductible is $2,500. By far the most common deductible chosen for personal car insurance is $500.

Uninsured/underinsured motorist: This coverage is not required by all states, but it is by some. Basically this coverage will help cover injury-related medical expenses if you are in an accident and the other driver is at fault but they don’t have insurance. It also protects any passengers in the car at the time of the accident. Uninsured/underinsured can also help with lost wages and pain and suffering. If the driver who hit you has coverage but with low limits, the underinsured policy will cover the difference.

You should also consider:

Gap coverage: Driving strangers around will rack up the miles on your car, which leads to deprecation. If the car is totaled your insurer will only pay the actual cash value of your car, not what you still owe on it. Gap insurance covers the difference.

Medical payments: This insurance covers the cost of medical expenses due to a car accident. It will even cover the deductible on your health insurance. If you do not have a health insurance policy, you should absolutely consider a medical payments policy.



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