Before driving for a rideshare company like Lyft, it’s important to understand what your insurance options are — a traditional auto policy alone won’t suffice. Lyft driver insurance is available, but there are coverage gaps during certain periods of the rideshare process that could leave drivers underinsured.
Personal auto insurance policies are designed for private use. That means if a carrier finds out you’re using your car to earn money without having a commercial or rideshare policy, you could be dropped. Worse, if you’re in an accident while having the wrong coverage driving for Lyft, your claim is likely to be declined entirely.
Lyft insurance requirements
Even though it won’t cover you while you’re driving for the Lyft app, you’ll need to upload proof of personal coverage that meets your state’s requirements before you’re approved. The Lyft team will then review the insurance policy documents within 24 hours and take additional steps to ensure your coverage adequately satisfies state laws.
But to remain insured while you’re driving for Lyft, you’ll use a combination of the company’s own coverage and a rideshare endorsement on your personal policy. If your insurer doesn’t offer rideshare coverage, you’ll need to switch carriers or else purchase a much more expensive commercial policy.
How Lyft car insurance works
All Lyft drivers automatically receive some car insurance from the company when driving for the app. This coverage is on top of your personal rideshare policy, and includes at least $1M in liability insurance — but only when you have a passenger in your car or are driving to pick one up. During those same intervals, Lyft’s car insurance also provides comprehensive and collision coverage, which pay for damage to your own vehicle, if you carry them on your personal auto policy.
Similarly during those periods, Lyft offers coverage for uninsured and underinsured motorist coverage (UM/UIM) and personal injury protection (PIP), which are required coverage in some states, if your policy has them.
So what about other times? If you are waiting for a ride quest, but not yet on your way to pick someone up, Lyft’s car insurance coverage leaves a gap.
Here’s the breakdown of how Lyft car insurance works throughout the different phases of the rideshare process:
| Driving phase | Description | Lyft coverage |
|---|---|---|
| 0 | App is closed. | – Driver is only covered by personal insurance policy. |
| 1 | App is open, driver is waiting for a ride request. | – Liability only, typically in $50K/$100K/$25K limits (some New York locations excluded). |
| 2 | App is open, driver is on the way to pick up a rider. | – Liability coverage of at least $1 million per accident in most markets. – Collision and comprehensive coverages, if your personal policy has, them with a $2,500 deductible. – Other coverages required in your state at the same limits as your policy. |
| 3 | App is open, driver is taking the passenger to their destination. | – Liability coverage of at least $1 million per accident. – Collision and comprehensive coverages, if your personal policy has them, with a $2,500 deductible. – Other coverages required in your state at the same limits as your policy. |
Phase One
While you’re waiting for a ride request, your personal auto coverage will take precedence over Lyft’s coverage. If your personal auto insurance policy doesn’t cover a claim made during this period, Lyft insurance will cover the following:
- $50,000 per person for bodily injury liability.
- $100,000 total for bodily injury liability.
- $25,000 per accident for property damage liability ($20,000 in Arizona and Nebraska).
Lyft insurance in phase one does not include any other types of coverage, like comprehensive coverage, collision coverage or personal injury protection (PIP), that might be helpful after an accident at this phase. If you have rideshare insurance, your endorsement covers this period in the amounts stated on your policy.
Learn more: Can you have two car insurance policies?
Phases Two and Three
Phases two and three of the Lyft driving process — which includes when you’re en route to pick up a new rider and the entirety of the ride itself — give you significantly more protection from Lyft’s company car insurance. This includes up to $1,000,000 of liability coverage per incident.
During these two stages, you’ll have contingent comprehensive and/or collision insurance, plus UM/UIM and PIP. That means that, if you have these types of coverage on your personal car insurance policy, Lyft’s company insurance will kick in after you’ve made a claim to your own auto insurance company.
This contingent comprehensive and collision coverage will only apply if the driver has full coverage on their personal policy, so not everyone will have this kind of coverage from Lyft. Additionally, coverage for this policy will be up to the actual cash value (ACV) of the driver’s vehicle, and the driver will be responsible for a deductible of $2,500 in the event of an accident.
Depending on state minimum car insurance laws, Lyft may also provide other protections, such as personal injury protection (PIP), uninsured motorist/underinsured motorist (UM/UIM) coverage, or even medical payments (MedPay) insurance.
Companies offering car insurance for Lyft drivers
If you don’t inform your insurer that you’re driving for Lyft and get the proper coverage beforehand, you won’t have coverage between rides. Worse, you’ll likely get dropped by your insurer even if there’s a small accident on the job — and that’s after they deny your claim entirely. Here are some of the major insurance companies that typically require rideshare insurance if you drive for platforms like Lyft, though state and driver restrictions apply:
- Allstate
- American Family
- Erie
- Esurance
- Farmers Insurance
- Geico
- Liberty Mutual
- Mercury
- Progressive
- Safeco
- State Farm
- Travelers
- USAA
Learn more: The best car insurance companies
Megan Lee is an editor, writer, and SEO expert who specializes in insurance, personal finance, travel, and healthcare. She has been published in U.S. News & World Report, USA Today and elsewhere, and has spoken at conferences like that of NAFSA: Association of International Educators. Megan has built and directed remote content teams and editorial strategies for several websites, including NerdWallet. When she`s not crafting her next piece of content, Megan adventures around her Midwest home base where she likes to drink cortados, attend theme parties, ride her bike and cook Asian food.
Lacie Glover is a Lead Writer and Editor with sixteen years’ experience in the insurance category. Prior to Jerry, she spent more than a decade on NerdWallet’s content team writing, editing and then overseeing the auto insurance category, as well as dabbling in other insurance and automotive topics. Prior to her career in the online personal finance content space, Lacie spent time in the hard sciences, in clinical research and chemistry labs. She has a bachelor’s degree from Colorado State University.
