Suppose you have a side gig driving for a company like In Drive or Careem. In that case, rideshare insurance can offer essential coverage, especially in cases where you get into a severe car accident.
While rideshare companies offer some coverage, it is usually inadequate, and you can face out-of-pocket expenses for sudden car repairs and medical bills.
Rideshare insurance is a good option for drivers who want to bridge the gap between their car insurance and the minimal coverage offered by rideshare companies. So before you turn on your ridesharing app and pick up a passenger, here’s what you need to know.
Rideshare Driving
It’s essential to know the three phases of a rideshare app to understand insurance for rideshare driving better:
- Available: The driver is available to pick up a ride.
- En route: The driver has accepted a ride and is coming to pick up a passenger.
- On the trip: The driver has picked up the ride and is going to the drop-off destination.
When an In Drive or Careem rideshare app is off, the car’s auto insurance applies. Once the rideshare app is on, In Drive or Careem provide some coverage.
Knowing the gaps between that coverage is critical to adequately protecting you. Here’s a breakdown of the three driving periods and what In Drive or Careem insurance covers.
Breaking Down Coverage
Here are definitions related to insurance for drivers provided by most rideshare companies.
Third-party liability coverage
This pays for bodily injury and property damage caused to a third party from a car accident. A third party is anyone or anything other than the driver or their vehicle. For example, if a rideshare driver rear-ends another car, auto liability insurance pays the other driver.
Uninsured/Underinsured Motorist Bodily Injury Coverage
This coverage pays for injuries suffered by a rideshare driver and their passengers if a car accident happens during a rideshare trip and another car is at fault and the driver does not have sufficient insurance.
This coverage also might apply in the case of a hit-and-run accident. The coverage limits offers by the rideshare insurance company can also vary across provinces and cities.
Contingent Collision and Comprehensive Coverage
Suppose you have comprehensive and collision coverage on a personal auto insurance policy. In that case, the rideshare company offers collision and comprehensive coverage for the time you’re going to pick up a ride or have a passenger.
A deductible (which is usually substantial) reduces a claim payment for these coverages. If you don’t have collision and comprehensive coverage on your vehicle, In Drive or Careem won’t provide it either.
Does A Personal Car Insurance Policy Cover Rideshare Driving?
Personal car insurance coverage typically excludes rideshare trips. A car insurance company has priced the policy and associated risks assuming that you will be either driving yourself, relatives, or friends.
This assumes that you aren’t earning money from driving and putting a lot of extra mileage on your car. As a result, a rideshare driver’s personal auto policy typically won’t supply coverage while you’re “at work.”
Minding the Gap
A rideshare driver might be happy with the insurance provided by the rideshare company, especially if the driver only has the minimum personal auto insurance. In such cases, a small liability coverage from In Drive or Careem can be a significant bonus.
But there are still gaps, which is where rideshare insurance comes in. For example, rideshare companies don’t usually offer collision or comprehensive insurance when the app is on, and you’re waiting for a ride request.
A personal auto policy with collision and comprehensive coverage will likely not cover that period. So if you accidentally back into a pole, you’d have no insurance for the damage.
In some companies, a rideshare driver might be able to buy a rideshare endorsement or add-on for a personal auto insurance policy. This endorsement can help fill gaps between the rideshare companies’ and drivers’ coverage.
What Happens if You Hide Your Driving Gig?
Failing to divulge to your insurance company that you’re a rideshare driver could lead to negative consequences. For instance, an insurer might reject a claim for damage a rideshare driver’s vehicle sustains in a crash if the driver doesn’t have a rideshare policy or endorsement. Or the insurer might drop the driver as a customer.
Most insurance companies rely on their customers to report when they’ve decided to become a rideshare driver since the insurer has no other way to gather that information. So, it falls on rideshare drivers to know what actions are needed to get the proper protections while working.
Conclusion
Since ridesharing has become such a popular option for gig-based work, most major insurance companies offer either a rideshare endorsement or a standalone rideshare insurance policy to cover drivers while they work. If you live in a city where rideshare insurance coverage is unavailable, you may want to consider purchasing your commercial insurance policy to protect yourself financially.
On top of those companies ‘ coverage, personal insurance for In Drive or Careem drivers is the best way to be fully insured on the job. Often called rideshare insurance, these hybrid policies include coverage for personal car use plus the times’ drivers are logged in to a ridesharing app but not covered by In Drive or Careem insurance.
Sadia Zaheer holds a Masters in Business Administration from IBA, Karachi. After working in several financial institutions in Client Management, Corporate Lending, Islamic Banking and Product Management she jumped careers to pursue a career in writing.
She is a Finance, Business and HR Development writer with four years of experience. She reads a lot and takes care of her multiple cats to remain calm.
