Driving for Uber, Lyft, DoorDash, or Instacart can be a smart way to earn extra income—or even make a full-time living—but many gig drivers don’t realize that their personal auto insurance might not fully protect them while they’re on the job. The truth is, the moment you turn on your rideshare or delivery app, your insurance situation changes.
Without the right policy, a single accident could leave you personally liable for thousands of dollars in damages. And unfortunately, many drivers only discover this gap when it’s too late.
Understanding how personal, commercial, and company-provided coverage fit together is critical if you want to stay legally and financially protected. Let’s break down how rideshare insurance works in 2025—and what you need to do to make sure you’re actually covered.
Why Regular Car Insurance Isn’t Enough for Gig Work
Your personal auto insurance policy is designed for personal use—commuting, errands, road trips, and daily driving. But once you start using your vehicle for profit, most standard policies classify that as commercial use.
That distinction matters because personal auto policies almost always include exclusions for business activity. So if you get into an accident while driving for a rideshare or delivery app—even if you weren’t carrying a passenger or order at the time—your insurer can deny your claim.
This means:
You could be responsible for repairing your car out of pocket.
You might owe for the other driver’s damages or injuries.
You could lose your personal coverage entirely if your insurer cancels your policy for misrepresentation.
To bridge that gap, drivers need special coverage that acknowledges both personal and commercial use.
How Rideshare Insurance Coverage Works
Rideshare insurance coverage isn’t all or nothing—it changes depending on what phase of work you’re in. Insurers and rideshare companies divide your driving activity into three periods:
Period 1: You’re logged into the app, waiting for a ride or delivery request.
Period 2: You’ve accepted a ride or delivery and are en route to pick up the passenger or order.
Period 3: You have a passenger in the car or are actively delivering an order.
Each period comes with different levels of coverage responsibility:
| Driving Period | Who Provides Coverage | Typical Coverage Limits |
|---|---|---|
| App Off (Personal Use) | Your personal policy | Your standard limits apply |
| Period 1 (Waiting for Request) | Limited coverage from rideshare company (liability only) | $50,000 per person, $100,000 per accident for injuries; $25,000 for property damage |
| Period 2 (En Route to Pickup) | Company coverage applies | Up to $1 million in liability, contingent comprehensive & collision if you have it on your personal policy |
| Period 3 (Ride/Delivery in Progress) | Company coverage applies | Up to $1 million liability plus uninsured/underinsured motorist coverage |
This tiered system means that gaps exist, especially in Period 1—when you’re online and available for work but haven’t accepted a request yet.
If you’re hit during that time, your rideshare company’s liability coverage may apply for other people’s damages, but your own car may not be covered for repairs unless you have a rideshare endorsement or a hybrid personal-commercial policy.
Rideshare Company Policies: What’s Actually Included
Each rideshare and delivery company provides some insurance, but coverage details vary.
Uber and Lyft
Both companies offer similar structures:
Period 1: Contingent liability only (applies if your personal insurer denies the claim).
Periods 2 and 3: Up to $1 million liability coverage, plus contingent comprehensive and collision coverage with a $2,500 deductible.
DoorDash, Uber Eats, and Instacart
Delivery apps typically offer less robust protection than passenger services. For example:
DoorDash: Provides liability coverage only while you’re on an active delivery. No coverage while waiting for orders.
Uber Eats: Mirrors Uber’s rideshare structure with $1 million liability during deliveries, but limited coverage in waiting mode.
Instacart and Grubhub: Generally do not provide collision coverage for your vehicle, even during deliveries.
Amazon Flex
Amazon Flex drivers have commercial auto insurance that includes liability, comprehensive, and collision during active deliveries, but not when driving between shifts or using the car personally.
The bottom line: company-provided insurance is contingent—it only kicks in under certain conditions and often only after your personal policy denies the claim.
How a Rideshare Endorsement Fixes the Gap
The simplest way to stay protected is by adding a rideshare endorsement to your personal auto policy.
This add-on—available through most major insurers—extends your personal coverage into Period 1, the “waiting” phase when neither your regular policy nor the company policy fully protects you.
What a rideshare endorsement does:
Keeps your personal coverage active when the app is on but you haven’t accepted a job.
Covers your vehicle for collision and comprehensive claims during that time.
Prevents gaps that could leave you financially exposed.
The cost? Usually an extra $15–$30 per month—a small price to pay for seamless protection.
Many large insurers, including State Farm, Progressive, GEICO, Allstate, and USAA, now offer these hybrid policies in most states. Some even provide rideshare-specific insurance, designed from the ground up for gig drivers who log significant hours.
When You Might Need Full Commercial Auto Coverage
For part-time gig drivers, a rideshare endorsement is usually enough. But if you’re driving full-time, or using your vehicle as your primary income source, your insurer may require a commercial auto policy instead.
Commercial coverage typically includes:
Higher liability limits.
Comprehensive and collision coverage for all driving periods.
Broader eligibility for business use (e.g., transporting goods or passengers).
While commercial insurance costs more—often starting at $150–$250 per month—it ensures full protection across all phases of your driving.
This is especially important if:
You’re working 30+ hours per week for multiple apps.
You lease or rent your car specifically for rideshare use.
You transport both passengers and goods.
Without commercial coverage, your insurer could still classify an accident as business-related and deny payment—even if you had an endorsement.
Watch for State-Specific Requirements
Insurance regulations for gig drivers vary by state. Some states—like California, Illinois, and Colorado—require rideshare companies to maintain specific minimum coverages, while others allow more flexibility.
For example:
California: Requires $1 million liability coverage for active rides and deliveries, plus $50,000 per person while waiting for a request.
Florida: Has lower minimums, so personal coverage becomes more critical.
New York: Rideshare coverage is strictly regulated, and Uber/Lyft drivers must carry commercial insurance through approved providers.
Always confirm the exact requirements for your state and ensure your policy complies.
Don’t Forget About Deductibles and Claim Limits
Even when your rideshare company’s policy covers you, the deductible is often much higher than what you’d pay under your personal plan. Uber and Lyft, for example, have a $2,500 deductible for collision claims. That means if your car needs $4,000 in repairs after an accident, you’re still paying more than half out of pocket.
To minimize financial risk, choose a rideshare endorsement or commercial policy with a reasonable deductible and confirm whether it overlaps with your personal one.
Additional Coverage Options for Gig Drivers
In addition to a rideshare endorsement or commercial policy, you may want to add:
Uninsured/Underinsured Motorist Coverage: Protects you if another driver causes an accident and doesn’t have enough insurance.
Gap Insurance: Covers the difference between your vehicle’s value and what you owe if it’s totaled.
Medical Payments or Personal Injury Protection (PIP): Helps pay for your own medical bills regardless of fault.
These add-ons are especially valuable if your gig income depends on being able to get back on the road quickly after an accident.
How to Talk to Your Insurer About Gig Driving
Some drivers hesitate to tell their insurer they’re doing rideshare or delivery work, fearing higher premiums. But withholding that information can backfire.
If your insurer discovers you were working when an accident occurred—and your policy excludes business use—they can cancel your policy entirely.
Be upfront and ask:
Do you offer a rideshare endorsement in my state?
What are the coverage limits during different phases of driving?
Would I need commercial auto insurance based on my driving frequency?
How do my deductibles work if I’m covered under both your policy and the rideshare company’s?
Insurance agents are used to working with gig drivers now and can help tailor a plan that balances cost and protection.
The Real Risk of Going Without Proper Coverage
The biggest mistake gig drivers make is assuming the company’s insurance “has them covered.” In reality, that coverage is conditional and designed primarily to protect the platform, not the driver.
If you cause an accident while waiting for a ride request and your insurer denies the claim, you could face:
Vehicle repair bills you can’t afford.
Lawsuits for medical expenses and property damage.
Loss of your personal insurance policy entirely.
One accident could erase months—or even years—of gig earnings. The right insurance coverage prevents that.
The Bottom Line
Rideshare and delivery driving blurs the line between personal and commercial use, and most standard auto policies weren’t built for that reality. Fortunately, insurers have caught up—offering hybrid solutions that fill the gaps between your app and your personal coverage.
If you’re using your car to earn income, make sure you understand which coverage applies in each driving phase, and don’t assume the company’s insurance will protect you in every situation.
The best strategy is simple: talk to your insurer, add a rideshare endorsement or commercial policy if needed, and keep your protection consistent across all periods of driving.
In the gig economy, your car is your business. Protecting it properly isn’t just smart—it’s essential for keeping your income (and peace of mind) rolling safely.
