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Uber Insurance Provides Protection, with a Few Catches

Uber driver driving woman

If you are a driver for the popular ridesharing platform Uber, Uber insurance will help cover you in the event of an accident. But it is important to know what that insurance does and doesn’t cover, and when that coverage is actually in force.

The Uber car insurance program is a multi-tier insurance platform that helps drivers who get into trouble when they are on the job.

What they cover depends largely on when the accident happened, what the driver’s official role with Uber was at the time, and what was going on in the driver’s app.

What coverage is offered in Uber car insurance

Think of Uber driving as a four-phase process.

  • Phase 1 – while you are off the clock and not driving for Uber
  • Phase 2 – while you are driving around looking for riders, but without an active ride engaged
  • Phase 3 – you accepted a ride in the app, but have not yet picked up the rider
  • Phase 4 – your rider is in the vehicle and you are on the way to the destination

During each phase, a different coverage applies, and — depending on the circumstances — you may or may not be covered by the Uber insurance policy.

In Phase 1, you are not driving for Uber and only your insurance is involved. So, if you are running to the store, or if the rider has stepped out of your vehicle, you are on you own if you nick another car with your bumper.

You are required by law to carry liability insurance, but — as we will discuss later — you should also have comprehensive and collision insurance, at a minimum.

During Phase 2, you are hoping to pick up a rider, but you haven’t yet accepted a trip. At that point, the first part of the Uber driver insurance kicks in. The Uber insurance provides you with a liability-only policy with a 50,000/100,000/25,000 limit.

That means that if you were to rear end someone while you were looking for a rider, Uber would pay up to $50,000 toward their medical bills, with up to a $100,000 personal injury limit per accident, and up to $25,000 in property damage to their vehicle.

While this is nice and exceeds the minimum insurance requirements in many states, it is nowhere near what experts suggest most people should carry.

Now, if you are injured in Phase 2, or if your vehicle is damaged, it would be up to your insurance to handle that — a detail we will talk about later.

Riders on board — time for Uber car insurance

Once you accept a ride but have not yet picked up the rider, you are in Phase 3. During this phase, Uber insurance coverage steps up.

While you are en-route to a ride and once you pick up the rider and enter Phase 4, Uber insurance takes the front seat. Their liability insurance kicks it up and they offer at least $1 million in liability coverage to cover someone else’s property in case of an accident or injury to another person, rider or pedestrian. But remember, that doesn’t include your injuries.

If the accident wasn’t your fault, Uber insurance also kicks in with uninsured, underinsured motorist bodily injury coverage. That coverage varies by state, but covers a minimum of $250,000 and would protect you and your passengers if you need medical care or suffered injuries because of someone else’s negligence.

Now, presuming you already are carrying your own comprehensive and collision insurance, the Uber insurance policy steps up again. That is when Uber car insurance will kick in and cover qualified damage up to your vehicle’s actual cash value — after a $1,000 deductible that is — regardless of who is at fault.

Uber insurance issues

Just like all things in life, the devil is in the details. Even though Uber insurance goes a long way to cover you, it isn’t the only insurance you need

For example, during Phase 1, Uber insurance isn’t in effect at all. During Phase 2, all you get is liability insurance, which is woefully lacking for someone who makes a living behind the wheel.

And remember that collision insurance in force in Phases 3 and 4? Well, those only apply if you already are carrying comprehensive and collision insurance yourself. If you don’t have a sufficient policy, Uber insurance won’t do a thing for  your vehicle’s damage.

Another thing to keep in mind is that your personal insurance wasn’t designed for commercial activity. While most insurance carriers offer additional riders or customized car insurance for Uber drivers, make sure you talk to your insurer or agent before something goes wrong to make sure you are covered properly.

Also, in many states Uber insurance is contingent on your insurance. That means one of the Uber insurance requirements is that it only kicks in after your insurance denies the claim. So, that further reinforces how important it is to keep proper coverage, regardless of what Uber insurance provides.

Also remember, Uber’s accident insurance only covers the actual cash value of your car. Actual cash value is not the same as what you owe on your car, so it makes sense to have GAP insurance if you are upside down on your loan. It would be a shame to get a $25,000 check to replace your car when you still owed $30,000 on it. And since you are driving for a living, you are racking up those miles and driving up that depreciation even faster.

Uber has helped thousands of people make a living and is a convenient service for millions of riders. And while Uber insurance offers a nice security blanket, making sure you are properly insured throughout the driving process will keep you, your riders and your vehicle safe and ready for the next ride.

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