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How Auto Insurance Works for Uber, Lyft, and Other Rideshare Drivers

How Auto Insurance Works for Uber, Lyft, and Other Rideshare Drivers

With all the excitement around Uber, Lyft, and other rideshare companies, you may have thought of signing up as a way to earn extra cash. As a driver, you may wonder about auto insurance implications and accident liability. Here, you’ll learn what to do to avoid expensive consequences and insurance surprises.

What Is a Rideshare Service?

Uber and other rideshare services compete directly with car services and taxi companies. Passengers hail a car from a smartphone app, and it usually costs less than a taxi. From an industrial standpoint, rideshare and taxi companies are similar in that they don’t operate or own the cars, and drivers aren’t employees. However, unlike a taxi company, almost any person can drive for a rideshare service. In most places, the only requirements are auto insurance, appropriate health and age, the successful completion of a road test, and a background check.

Driving for a Rideshare Service May Invalidate Your Personal Auto Coverage

Your auto insurance policy may not cover you if you’re driving for a service such as Uber or Lyft. Personal policies have a long list of exclusions, and “driving for hire” is usually on the list. If you’re driving for a rideshare service, your policy may consider this “commercial driving.” If you’re not covered, then you need rideshare insurance in Chicago.

You May Need a CDL

If you’re driving for a rideshare company, you’re in a professional capacity the minute you pick up passengers. Although you’re an independent contractor, your state may classify you as a commercial driver. If you fall into this group, you may need a CDL (commercial driver’s license) to operate lawfully and fulfill insurance requirements.

If you’re considering working with a rideshare service like Lyft or Uber, it pays to be honest with your insurer about your coverage needs. Visit us at to learn more or call Accurate Auto Insurance to request a quote for rideshare insurance in Chicago.

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