If you're driving for Uber or Lyft in 2026, here's something that might keep you up at night: the moment you turn on that rideshare app, your personal car insurance probably stops covering you. And the coverage your rideshare company provides? It has some serious gaps that could leave you on the hook for tens of thousands of dollars. This isn't meant to scare you—it's just the reality of how rideshare insurance works, and understanding it could save you from financial disaster.
The good news? Filling those gaps is easier and cheaper than you think. Let's break down exactly what rideshare insurance is, where the coverage gaps are, and how to protect yourself without breaking the bank.
The Coverage Gap That Catches Drivers Off Guard
Most people assume that when they're driving for Uber or Lyft, they're automatically covered. Unfortunately, it's not that simple. Your personal auto insurance policy almost certainly has a commercial use exclusion, which means it won't cover you when you're using your car to make money. The moment you flip on that rideshare app, you've crossed into commercial territory.
Here's where it gets tricky. Rideshare coverage works in three distinct periods, and the insurance that applies changes dramatically depending on which period you're in. Period 0 is when your app is off—this is just regular personal use, and your personal insurance applies normally. Period 1 begins the second you turn on your rideshare app and make yourself available for rides, but you haven't accepted a request yet. Period 2 starts when you accept a ride and are driving to pick up your passenger. Period 3 is when you have the passenger in your car until you drop them off.
The danger zone is Period 1. During this time, Uber and Lyft only provide liability coverage of $50,000 per person, $100,000 per accident, and $25,000 for property damage. That might sound like a lot, but if you cause a serious accident, medical bills alone can easily exceed $50,000 per person. Even worse, this coverage typically doesn't include collision or comprehensive coverage for your own vehicle—if you total your car during Period 1, you could be completely out of luck unless you have a rideshare endorsement.
What Uber and Lyft Actually Cover
Once you accept a ride request and enter Period 2, coverage improves significantly. Both Uber and Lyft provide $1 million in liability coverage when you're en route to pick up a passenger or actively transporting them. This also includes $1 million in uninsured and underinsured motorist coverage, which protects you if you're hit by someone without adequate insurance.
During Periods 2 and 3, Uber also provides contingent collision and comprehensive coverage with a $2,500 deductible (or $1,000 in some states), but only if you already have collision coverage on your personal policy. If you dropped collision coverage to save money on your personal insurance, you won't have it during rideshare trips either. This is a critical detail many drivers miss.
The word 'contingent' is important here. It means the rideshare company's coverage is secondary—it only kicks in if your personal insurance denies the claim. But remember, your personal insurance will almost certainly deny any claim that happens while you're ridesharing because of that commercial use exclusion. This creates a messy situation where you might have to file a claim with your personal insurer, get denied, and then file with the rideshare company. It's not ideal, which is why a rideshare endorsement makes so much sense.
How a Rideshare Endorsement Solves the Problem
A rideshare endorsement (also called TNC coverage, for Transportation Network Company) is an add-on to your personal auto policy that extends your coverage to fill the gaps during rideshare driving. Think of it as a bridge between your personal policy and the coverage your rideshare company provides.
Most rideshare endorsements focus primarily on Period 1, providing full coverage when your app is on but you haven't accepted a ride yet. Some companies, like State Farm, offer comprehensive coverage across all three periods, which can simplify the claims process significantly. Instead of dealing with multiple insurers, you have one policy that covers you whether you're driving personally or for rideshare.
The cost is surprisingly reasonable. In 2024-2025, rideshare endorsements typically cost between $5 and $30 per month, depending on your state, insurance company, and driving record. USAA offers some of the cheapest options at around $6 to $16 per month for eligible members. Allstate charges about $5 to $10 monthly. Progressive averages around $38 per month, while State Farm typically adds 15-20% to your existing premium. That works out to maybe the cost of a couple of rideshare trips per month—a small price for substantial peace of mind.
Which Insurance Companies Offer Rideshare Coverage
Not all insurance companies offer rideshare endorsements, and coverage details vary significantly. The major players include State Farm, Progressive, Allstate, USAA (for military members and families), Farmers, Erie, and Mercury Insurance. Each has different coverage options, pricing, and availability depending on your state.
If you're shopping for rideshare insurance, get quotes from at least three companies. The price difference can be substantial—some drivers report paying as little as $6 per month while others pay closer to $40 for similar coverage. Also ask specifically about what periods are covered, what the deductibles are, and whether the coverage is primary or contingent. These details matter when you actually need to file a claim.
Some companies offer commercial rideshare policies instead of endorsements. These are usually more expensive but provide comprehensive coverage with higher limits. They might make sense if you're driving full-time or have significant assets to protect, but most part-time drivers find that a rideshare endorsement offers the right balance of coverage and cost.
What Happens If You Don't Disclose Rideshare Driving
Here's a scenario that plays out more often than it should: a driver starts doing rideshare without telling their insurance company, figuring they'll save money by avoiding the endorsement fee. Then they get into an accident during Period 1. When they file a claim, the insurance company investigates, discovers the rideshare activity, and denies the claim for material misrepresentation. Not only is the current claim denied, but the policy can be canceled retroactively, leaving the driver personally liable for all damages.
Insurance companies have gotten very good at discovering undisclosed rideshare activity. They cross-reference claim information with rideshare companies, check social media, and look for patterns that suggest commercial use. The few dollars you might save by not disclosing could cost you everything if you're found liable for a serious accident without coverage. It's simply not worth the risk.
How to Get Started With Rideshare Insurance
Before you accept your first rideshare trip, call your current insurance company and ask about rideshare coverage. If they offer an endorsement, get a quote and compare it to what you'd pay by switching to a company that specializes in rideshare coverage. Make sure to ask about coverage limits, deductibles, and which periods are covered.
If your current insurer doesn't offer rideshare endorsements, don't panic. You'll need to switch companies, but this is actually an opportunity to shop around and potentially save money overall. Get quotes from State Farm, Progressive, Allstate, and any other companies available in your state that offer rideshare coverage. Compare not just the price, but also the reputation for claims handling—when you need coverage, you want a company that pays promptly and fairly.
Once you've secured rideshare coverage, keep documentation in your car. Save your insurance card, a copy of your policy declarations page showing the rideshare endorsement, and contact information for filing claims. If you're ever in an accident, you'll want this information readily available. Also keep Uber or Lyft's insurance information handy—you can find it in the driver app or on their websites.
Rideshare driving can be a great way to earn extra income, but only if you're properly protected. The coverage gaps are real, and they can be financially devastating if you're caught without the right insurance. Spending $10 to $30 per month on a rideshare endorsement is a small investment that protects not just your car, but your financial future. Take the time to get the right coverage before you start driving—your future self will thank you.
