As city congestion and widespread smartphone use fuel the ridesharing industry’s phenomenal growth, more and more drivers are staking their claim to this significant side hustle. But the business can pose some significant personal financial risks if you don’t investigate your own auto insurance needs first. 

While state laws and transportation network company (TNC) insurance plans add protection for some parts of your driving day (or night), everything isn’t covered all the time. There are coverage gaps, and it’s up to you to patch them up. That’s why Insurify makes it easy to price supplemental rideshare insurance options online and on the go.     

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How Rideshare Insurance Works 

For insurance reasons, the rideshare experience is divided into distinct periods. In an accident, these distinctions make figuring out who is responsible for what and when a lot easier. Your TNC maintains car insurance on your behalf for some but not all of these periods, so closing the gap with independent rideshare insurance makes sense.   

  • Period 0: when the rideshare app is off (During this period, insurance companies assume you are using your vehicle for personal use only. You are responsible for meeting state minimums for liability insurance. You may also want additional coverage like comprehensive or collision to pay for damages to your vehicle.) 
  • Period 1: when you open the app and you’re waiting for a ride request until a match has been made (If the accident is your fault, Uber and Lyft provide liability insurance to protect the other motorist.) 
  • Period 2: after a match has been made, while you’re en route to pick up a passenger (California law requires rideshare companies to carry a $1 million bodily injury liability policy to cover you and your passengers during this period. Comprehensive and collision benefits vary between companies.)
  • Period 3: after you’ve picked up your passenger until they exit your vehicle (The California law regarding $1 million bodily injury liability applies here as well.)

In short, Uber’s and Lyft’s built-in commercial policies apply to periods 1, 2, and 3 and include liability insurance coverage for you and your passengers. So when does dedicated rideshare insurance (also called a rideshare endorsement) from an independent company make sense? 

  • When the rideshare app is off. (Personal car insurance meeting state minimums is required. It’s also a good idea to consider other insurance options that protect you and your vehicle during this time.) 
  • While you’re waiting for a fare. (TNC ridesharing insurance during this slice of time is liability only. To avoid paying out of pocket for car repairs, you may want to consider collision and comprehensive coverages.).
  • When you want coverage that extends beyond the TNC’s coverage limits or want to experiment with different deductibles.  

TNCs, well aware of the gaps, provide add-on coverages you can opt into, like injury protection. While this is admirable, what if you want more coverage? What if the deductible amount doesn’t sit right with you? Sampling different coverages from outside insurance agencies is one way you can be sure you are getting enough coverage at the right price. 

Your personal auto insurance policy can apply during some of these periods, depending on who is at fault and what coverage you already have from your TNC. The best way to be sure you are covered correctly during all of these periods is to talk to your agent about your personal insurance needs, including your rideshare activities.  

>>>MORE: Best Companies for Rideshare Insurance

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California Laws on Rideshare Insurance Requirements

California law ensures that both the driver and the TNC act responsibly to protect drivers, passengers, and others on the road. When the app is off, California drivers must abide by the state’s minimum insurance requirements: 

  • $15,000 bodily injury liability coverage per person injured in an accident
  • $30,000 of bodily injury liability coverage per accident
  • $5,000 of property damage liability coverage per accident

Remember, liability insurance only covers the other person and other people’s property if you get in an accident. If you want to get your car fixed without paying for it all yourself, you’ll want to be sure you have a combination of collision coverage and comprehensive coverage on your policy.

Once the rideshare app is on, drivers must have the following minimums:

  • $50,000 bodily injury liability coverage per person injured in an accident
  • $100,000 of bodily injury liability coverage per accident
  • $25,000 of property damage liability coverage per accident

These minimums are met by the rideshare company. California also requires rideshare companies to carry a $1 million liability insurance policy once a paired passenger has entered the vehicle. 

>>> MORE: Cheap Car Insurance in California

Rideshare Insurance Companies in California 

While TNCs offer many insurance options, dedicated rideshare insurance can fill in the gaps. Seven of the insurance providers on the following list offer rideshare insurance for under $200 a month. Avoid having to talk to multiple insurance agents, and get your own list of best insurance company options with a free quote from Insurify.

If you’re not familiar with every name you get back, don’t worry. Every insurance company listed is a credible company. Insurify knows that some drivers prefer to interact with smaller regional carriers, while others are more comfortable with big names like GEICO and USAA

Rideshare Insurance Company Monthly Premium for California Rideshare Driver
Bluefire $121.00
Anchor $134.00
Travelers $166.00
21st Century $166.00
Clearcover $172.00
National General $189.00
Aspire General $190.00
Mercury $200.00
Bristol West $204.00
Workmen’s $221.00
Sun Coast $236.00
Kemper $257.00
Infinity $273.00
Dairyland $690.00
Pronto $993.00

>>>MORE: Best Insurance Comparison Sites

California Requirements for Rideshare Drivers

While Uber and Lyft have a set of requirements for drivers (including the kind of car you drive and the documents you need in place), there are certain practices specific to California (and even certain California cities) that drivers must abide by. Being unaware of these rules could jeopardize your standing with the company or keep you out of business altogether. 

In California, you must be at least 25 years of age to drive for a ridesharing company. Recently passed Prop 22 outlines additional California requirements for TNCs like Uber and Lyft, including requiring background checks for all app-based drivers and having a zero-tolerance policy toward drivers suspected of working while under the influence of drugs or alcohol.

Depending on the county in which you live, you may also be required to have a business license, and all drivers in this state are required to have a vehicle inspection performed by a licensed mechanic before you can make yourself available on the platform. Your car has to be of a certain age as well, the specifics of which vary from region to region.

Indeed, all of these rules are a lot to keep up with. For this reason, most TNCs provide information online as to how you can qualify as a driver in this state. Besides looking online, you can call a representative who will help you set up your account and go through any questions you may have on the state particulars.

Filing a Claim After an Accident As a Rideshare Driver in California

It’s terrible all around when you have an accident, but having your car out of service for any length of time means lost money for you. Luckily, both Uber and Lyft provide drivers with straightforward instructions for filing a claim, though these things always take time to work through. 

Some drivers wrongly assume that their personal auto insurance policy will cover a claim. That is not true. In fact, the state of California requires that all rideshare drivers carry commercial insurance or secure a rideshare endorsement from an insurer. Without a rideshare insurance policy, you are breaking the law and risking an extreme financial burden. 

Find Cheap Rideshare Insurance in Minutes

Making the switch to an app-based driving business is exciting but can be a confusing time for drivers concerned about coverage. Insurify helps drivers identify the cheapest rideshare auto insurance quotes in minutes. And once you arrive at your coverage, you can easily experiment with different policy limits without having to start over from scratch.

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Rideshare Insurance in California: Frequently Asked Questions

Do you need rideshare insurance in California?

Though California requires rideshare companies to insure drivers when the rideshare app is on, how much, who, and what is covered depends on the driving period you’re in. Supplementing your personal coverage with rideshare coverage provides added protection for you and your vehicle.

How much does rideshare insurance cost in California?

Though you can get monthly rideshare insurance from just under $200 all the way up to $900, the average cost of rideshare insurance in California is $264.

Which insurance companies in California provide rideshare insurance?

While names like Farmers Insurance, Mercury Insurance, Allstate, Esurance, and State Farm are the most familiar players providing rideshare insurance to California drivers, small players serving limited markets exist too and may be a better match.

 

Updated July 22, 2021

Jeannette Wisniewski is a technology writer whose passion is encouraging people to engage with technology by making it more understandable and more interesting. Though she enjoys writing business copy for a wide range of subjects, she is most inspired by emerging tech and its applications. She is a graduate of San Jose State University, a Georgia Peach at heart, and happy to call Boise, ID home.