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.
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.
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.
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.
Uber drivers are not required to have commercial auto insurance if they use their personal vehicles. However, Uber drivers are encouraged to carry rideshare insurance, which covers the gaps between their personal car insurance policy and Uber’s insurance policy.
There are certain situations where you may need commercial auto insurance and personal auto insurance. For example, if your business owns a work truck and you own a second vehicle for personal use, you would need two separate insurance policies.
Commercial auto insurance and business auto insurance are usually the same thing. Insurance companies may use these two terms interchangeably.
When you purchase commercial auto insurance, you can add drivers (usually employees) to the policy. All of the insured drivers listed on the policy are covered. However, employees are not automatically covered when you purchase commercial car insurance.
Commercial car insurance doesn’t cover personal use. It only covers vehicles that are used for business purposes. If you use a business vehicle for personal use and something happens, it’s unlikely that the claim would be covered by your commercial auto insurance policy.
At a minimum, commercial auto insurance covers the driver’s liability if they cause an accident. You can also add optional coverages for more protection, like collision insurance, comprehensive insurance, uninsured/underinsured motorist insurance, and roadside assistance.
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