Driving for apps like Uber, Lyft, DoorDash, or Instacart can be a great way to make extra money—or even a full-time living. But there’s one question every driver should ask before hitting the road: am I really covered if I get into an accident?
The answer isn’t as simple as you might think. Standard personal car insurance usually isn’t enough, and relying only on the coverage offered by rideshare or delivery companies can leave big gaps. Understanding how personal and commercial policies work together is key to protecting yourself and your income.
Why Personal Auto Insurance Isn’t Enough
Most personal car insurance policies specifically exclude coverage if you’re driving for hire. That means if you’re using your car for Uber, Lyft, DoorDash, or other gig work, your insurer could deny your claim after an accident.
Why? Because driving commercially increases your risk. You’re on the road more often, sometimes in unfamiliar areas, and transporting passengers or goods. Insurers classify that as “business use,” not personal use.
Without the right coverage, you could be responsible for:
Repairing your own vehicle.
Paying medical bills out of pocket.
Covering damage to other cars or property.
How Rideshare and Delivery Coverage Works
Most gig platforms provide some level of insurance, but it depends on what you’re doing at the time of the accident. Insurers break this down into three periods:
Period 1: App On, Waiting for a Request
You’re logged into the app but haven’t accepted a ride or delivery yet.
Uber and Lyft usually provide limited liability coverage here, but no collision or comprehensive.
DoorDash and other delivery apps may offer little or no coverage in this period.
Period 2: En Route to Pickup
You’ve accepted a request and are on the way to pick up a passenger or order.
Most companies provide liability coverage during this time, sometimes with higher limits.
Collision and comprehensive may apply, but usually only if you also carry them on your personal policy.
Period 3: Passenger or Goods in the Car
You’re actively transporting a passenger or order.
This is when coverage is strongest: Uber, Lyft, and others often offer $1 million in liability insurance plus some physical damage coverage.
Deductibles are usually high, and payouts may be limited.
Where the Gaps Are
The biggest gap is in Period 1—when the app is on, but you haven’t accepted a request. This is when many accidents happen, and neither your personal insurer nor the rideshare company may fully cover you.
Other gaps include:
Limited collision coverage (especially if you don’t carry it personally).
High deductibles from company-provided coverage.
Lack of coverage for lost income if your car is in the shop.
The Solution: Rideshare and Delivery Endorsements
Many insurance companies now offer rideshare endorsements or hybrid policies that cover both personal and commercial use. These add-ons:
Extend your personal coverage into Period 1.
Fill in gaps left by Uber, Lyft, or delivery platforms.
Often cost much less than a full commercial auto policy.
If you’re primarily doing rideshare or delivery part-time, an endorsement is usually the best option.
When You Might Need a Commercial Policy
If gig driving is your full-time job, or if you use your vehicle for multiple business purposes (like deliveries plus contracting), your insurer may require a commercial auto policy. These are more expensive but provide comprehensive protection for business use.
How to Protect Yourself as a Gig Driver
Call Your Insurer: Be honest about how you use your car. Hiding rideshare or delivery work can lead to denied claims or even policy cancellation.
Ask About Endorsements: Not all insurers offer them, but many major ones do.
Compare Policies: Premiums vary, and some insurers specialize in rideshare coverage.
Factor in Deductibles: Uber and Lyft, for example, have $2,500 collision deductibles. Make sure you can handle that risk.
Track Your Time on the App: Know which period you’re in so you understand what coverage applies.
Real-World Example
Imagine Alex drives part-time for Uber and DoorDash. One evening, he’s logged into Uber but hasn’t accepted a ride request. He rear-ends another car.
His personal insurer denies the claim because he was using the car for commercial purposes.
Uber’s coverage at this stage is limited—only liability to the other driver, not repairs to Alex’s own car.
Without a rideshare endorsement, Alex is left paying thousands for his own vehicle repairs.
With a rideshare endorsement, both his liability and collision would be covered, saving him from major out-of-pocket costs.
Final Thoughts
Driving for Uber, Lyft, DoorDash, or other gig apps can be rewarding—but only if you’re properly insured. Relying on personal auto insurance alone is risky, and company-provided coverage has major gaps.
The best protection is to talk with your insurer about rideshare or delivery endorsements, or explore a commercial policy if driving is your main income. A little extra planning ensures that one accident doesn’t erase all your hard-earned gig earnings.
