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.
