What Type Of Auto Insurance Should Uber Drivers Get?
The idea of the Uber ride sharing app has excited a lot of people around the world, but the business structure for Uber drivers continues to get more complicated. In an attempt to help Uber drivers understand their insurance needs, we are offering this short tutorial on what type of auto insurance Uber drivers need and where they can get it.
Your Personal Auto Policy Is Not Going To Help
Uber tends to be vague on the role of your personal auto insurance in your Uber business. Uber contends that any coverage the company offers is to be used in conjunction with your personal auto policy, but the truth is that your personal auto insurance is going to be almost worthless in an Uber situation.
The moment that you use your personal auto insurance in a commercial capacity, your personal auto insurance will no longer protect you, your vehicle, or your passengers. This includes the time spent driving to pick up Uber clients, and the time you spend driving around waiting for an Uber client to contact you. You could try to argue your point with your personal auto insurance company if you ever get in an accident, but you are probably going to lose your argument.
Many states require ride sharing companies to offer their drivers a $1 million per incident commercial liability policy. Uber offers such a policy for all of its drivers, but it is only in effect while the Uber app is on. So if you drive for Uber, you need to make sure that you have your app on while driving passengers around to take advantage of the liability coverage.
The problem with Uber insurance is that it only covers medical costs for you and your passengers if you get in an accident. If your car is damaged in an accident, then you will need to rely on your personal auto insurance to cover the damage. As we discussed earlier, this sounds great in concept but does not always work well in practice.
Uber drivers, when carrying passengers, are considered professional drivers and need to have a commercial driver’s license in many states. An Uber driver driving without a commercial license, in some states, could be subject to criminal prosecution if they get into an accident. That only adds insult to injury when your personal auto insurance company lets you know that your damage will not be covered.
Uber drivers should get commercial driver’s licenses, and then get commercial auto insurance to fill in the gap left by the Uber insurance. While the laws regarding ride sharing are still fluid in many states, protecting yourself as an Uber driver with a commercial driver’s license and commercial insurance is a smart way to go.
When ride sharing through the Uber app first appeared in cities all over the world, it sounded like a great idea to everyone. The costs for consumers were significantly less than taxis, and people could make extra money driving for Uber. But when questions about auto and liability insurance started popping up, Uber drivers found themselves in the middle of a nasty legal storm. Uber drivers need to take the necessary steps to protect themselves from prosecution and unexpected costs by carrying the right kind of driver’s license, and the right kind of insurance.