You’ve got a little bit of free time and decide to take advantage of it by becoming a driver for a transportation network company (TNC) like Uber or Lyft. It’s a great idea and an easy way to earn extra income. But do you know what kind of coverage you need to protect yourself? Read on as we debunk common myths about rideshare coverage and how to fill in any coverage gaps.
Periods of ridesharing
First, let’s define the three periods of ridesharing through the eyes of the ride-sharing business model:
A driver has turned on the rideshare app and is waiting for a customer match. The driver could be doing anything during this time-- sitting idly in their car, driving around, or even taking care of personal business.
Period 2 is defined as the moment a driver gets a match and is on their way to pick up their customer.
Finally, period 3 covers the time when a customer gets into the driver’s car, is driven to their desired location and exits the vehicle.
Gaps in coverage
Rideshare companies like Uber and Lyft (often referred to as a TNC or transportation network company) typically offer liability insurance protection once a driver is in period 1, but these companies are most likely going to have higher deductibles and might not have the complete coverage you want. Your personal auto policy might not have the coverage either, as many policies contain exclusions when a person uses their vehicle for livery services. Because of this, there are often gaps in coverage between the rideshare company’s insurance policy and the driver’s personal policy.
For example, if you’re driving for Uber and are in period 1, you are covered for your liability to a third party if you’re at fault in an accident. This is where ridesharing gap coverage comes in and covers the gap between your insurance policy and the rideshare’s policy.
Ridesharing Gap Coverage
Ridesharing Gap Coverage is designed to fill the gaps between your personal auto insurance policy and the rideshare policy. In a ridesharing gap coverage policy, you’re covered throughout periods 1, 2 and 3.
During period 1
While waiting for a passenger match, the TNC endorsement will fill the gap by providing you with comprehensive, collision, uninsured/underinsured, roadside and medical coverage.
During period 2
When you’re in route and you’ve purchased comprehensive and collision coverage, the ridesharing gap coverage might provide a lesser comprehensive and collision deductible than offered by Uber or Lyft.
During period 3
From the time your passenger gets picked up until drop off, ridesharing gap coverage will provide deductible gap coverage to help reduce your out-of-pocket expense should you get in an accident during this period.
Adding ridesharing gap coverage to your policy
Becoming a driver for a transportation network company like Uber or Lyft is a no-brainer when you’re looking for some extra cash, but you need to make sure you’re properly covered. Get in touch with a Block Insurance agent today to add ridesharing gap coverage to your policy.