Rideshare drivers can deduct the cost of car insurance on their taxes. However, you must decide whether to deduct the actual expenses (such as insurance, gas, oil changes, and repairs), or use the standard mileage deduction. The amount of car insurance premiums deducted must be equal to the percentage of business use. That means if you use your car for ridesharing 50% of the time, you can only deduct 50% of your insurance premiums.
Why you can trust Rate Retriever
Our rates are based on public rate filings obtained by analytics company First Interpreter. While we may partner with some of the carriers you see on our site, we maintain editorial independence and it does not affect the rates you see. Read more about our rating methodology or see our rigorous editorial policy.
Our rates are based on public rate filings obtained by analytics company First Interpreter. While we may partner with some of the carriers you see on our site, we maintain editorial independence and it does not affect the rates you see. Read more about our rating methodology or see our rigorous editorial policy.
Written by Elizabeth Rivelli
Edited by Alyssa DiCrasto
Last updated: August 8th, 2024
What's on this page?
Rideshare car insurance
Driving for a rideshare company like Uber or Lyft can be a lucrative side hustle or full-time job. But before you sign up to become a driver, it’s important to make sure you have the right type of insurance. Standard car insurance policies don’t provide complete protection when you drive for a rideshare service. To fill the gaps in your personal car insurance, you should consider purchasing rideshare car insurance.
In this guide, we’ll explain what rideshare insurance is, what it covers, and who needs it. We’ll also share which companies offer the best insurance for rideshare drivers.
What is rideshare car insurance?
Rideshare car insurance is a specific type of insurance that covers people who drive for a transportation network company (TNC), like Uber or Lyft. Most rideshare insurance policies are sold as an endorsement to your personal car insurance policy.
When driving for a rideshare service, each part of the trip is broken down into phases. Depending on the phase, your personal car insurance policy and/or the rideshare company’s insurance policy applies. However, there are some phases of ridesharing when neither policy applies, or the coverage is limited—this is where rideshare car insurance comes in.
Did you know?
- Rideshare insurance provides protection during the phase when you’re logged into the rideshare app and are waiting to accept a ride request.
- If you get into an accident during this phase, your rideshare insurance policy would cover your liabilities. If the policy includes collision and comprehensive insurance, it would also cover damage to your vehicle.
What does rideshare insurance cover?
Rideshare insurance can provide many of the same coverages you get with a personal car insurance policy. While every rideshare car insurance endorsement is slightly different, here are the coverages that are commonly available:
- Liability insurance: If you cause an accident while driving for a TNC, liability insurance covers your financial responsibilities for bodily injuries and property damage.
- Collision insurance: Covers your vehicle repairs if you get into an accident while driving for a rideshare service.
- Comprehensive insurance: Covers non-collision vehicle damage, such as damage from falling objects, hail, and accidents with animals.
- Uninsured/underinsured motorist insurance: Applies if you get hit by a driver who is uninsured or doesn’t have enough insurance to pay for your losses in full.
When do I need rideshare insurance?
You should get rideshare insurance before you start driving for Uber or Lyft. Most personal car insurance policies don’t apply when using your vehicle for business purposes. If you get into an accident while driving for a TNC and you don’t have rideshare insurance, your insurance company might not cover the claim.
Do I need to tell my insurance I drive for Lyft or Uber?
When you sign up to become a rideshare driver, it’s important to notify your car insurance company right away. An agent can explain what your personal car insurance policy will cover and when your coverage won’t apply. They can also help you add a rideshare endorsement to your policy and make sure you have adequate protection while working.
Keep in mind that if your current car insurance company doesn’t offer a rideshare endorsement, you will need to find a different insurer that can sell you a standalone rideshare insurance policy.
Best insurance for rideshare drivers
There are many car insurance providers that sell rideshare endorsements, but for the best car insurance company for rideshare drivers overall, we like Progressive.
With Progressive, some of the optional coverages you have under your personal car insurance policy apply when ridesharing, including roadside assistance, trip interruption coverage, and rental car reimbursement.
Progressive also offers deductible reimbursement for its rideshare customers. If you need to file a claim for an incident that occurred while driving for Uber or Lyft, Progressive will cover the difference between the TNC’s insurance deductible and your personal car insurance deductible.
Here are some other reputable car insurance companies that offer rideshare insurance:
- USAA
- Mercury
- State Farm
- Allstate
- Farmers
Frequently asked questions
What does ridesharing mean with insurance?
When it comes to car insurance, ridesharing generally means that you are using your personal vehicle to transport passengers or other goods, and are getting paid for it. Ridesharing typically does not apply to people who use a vehicle for full-time business purposes. For example, if you own a van that is used to operate your full-time business, you would need commercial car insurance instead of rideshare insurance.
Does DoorDash or UberEats count as rideshare for insurance?
Yes, people who drive for on-demand food delivery services like DoorDash and UberEats should also carry rideshare insurance. When you drive for on-demand food delivery companies, you are using your personal vehicle for business use, which is not covered under personal car insurance policies.
Will my personal car insurance cover rideshare?
Your personal car insurance policy doesn’t apply when driving for a rideshare service. To get protection while driving for Uber or Lyft, you must add a rideshare endorsement to your personal car insurance policy. Most rideshare endorsements provide common coverages like liability insurance, collision insurance, comprehensive insurance, and uninsured/underinsured motorist insurance.
