Will My Insurance Company Know If I Drive For Uber?

Driving for rideshare companies like Uber or Lyft can be an excellent way to earn extra income. However, many drivers wonder if their auto insurance company will find out that they are using their personal vehicle for commercial purposes. This is an important question to consider before signing up as a rideshare driver.

How Uber Interacts With Your Insurance Company

When you first sign up to drive for Uber, they will ask you to provide proof of valid personal auto insurance. However, Uber does not directly inform your insurance company that you plan to drive for them.

Providing proof of insurance to Uber satisfies their requirements. They do not contact your insurer to validate coverage or inform them you will be rideshare driving.

So in short, Uber itself does not proactively reach out to your insurance provider. But that does not mean your insurer will never find out. Here are some scenarios where your insurance company could become aware of your rideshare activities:

• Getting in an accident while driving for Uber. If you get in a crash while transporting passengers or en route to pick up riders, this could trigger your insurance company to investigate and uncover you are rideshare driving.

• General audits or checks by your insurer. Some insurance companies may do periodic reviews of policyholders’ driving activities and connections to rideshare apps. This could reveal you are using your car commercially.

• Insurance renewal forms. When renewing your policy, you may be asked to confirm whether you use your vehicle for rideshare driving. Any misrepresentation on the forms could lead to canceled coverage.

• State laws requiring disclosure. Some states have regulations requiring rideshare companies to disclose driver information to insurers if requested or in the event of an accident.

While Uber itself does not proactively tell your insurance provider, there are scenarios where your insurer can still find out. It is best to be upfront and honest to avoid any issues.

Why Proper Insurance Matters

Carrying adequate insurance tailored to rideshare driving is crucial. Here’s why:

• Personal policies often exclude commercial use. Standard personal auto policies are designed for private, non-commercial use. Driving for Uber is considered commercial use by most insurers.

• Coverage gaps. Uber’s insurance does not cover everything in all scenarios. There can be coverage gaps if you only rely on their policy.

• Canceled coverage. If you don’t have the right policy and your insurer finds out you drive for Uber, they may cancel your coverage.

• Out-of-pocket expenses. Lacking proper coverage could leave you having to pay high accident-related expenses out of your own pocket.

• Suspended driving. Uber will suspend your account if you don’t have adequate auto insurance.

The bottom line is that you need insurance that specifically accommodates rideshare driving. This specialty coverage fills gaps between your personal policy and Uber’s policy.

Options for Rideshare Insurance

Here are some options to make sure you carry suitable coverage:

• Rideshare endorsement or rider. This is an add-on to your existing personal policy that provides coverage while driving for Uber/Lyft. It usually costs an extra $10-$20 per month.

• Hybrid or commercial policy. This policy is designed specifically for rideshare drivers, blending personal and commercial use. It provides comprehensive coverage but is more expensive.

• Uber/Lyft company policies. In some states, Uber and Lyft offer their own insurance policies tailored for drivers. This may be the most affordable and convenient option.

• Pay-per-mile policies. With these emerging offerings, you only pay for insurance coverage for the specific miles/times you are rideshare driving.

Be sure to inform your insurer that you drive for Uber/Lyft and discuss the best options to get insured. Read policies closely and consult your state’s laws.

What Happens If You Don’t Tell Your Insurer?

Intentionally hiding your rideshare driving from your insurance company is considered fraud. If discovered, it can have serious consequences:

• Claims denial. Your insurer can deny accident claims if you violated policy terms.

• Canceled policy. Your insurer can terminate your policy retroactively once fraud is uncovered.

• Difficulty finding new coverage. Having a policy canceled for fraud makes it hard to find affordable insurance going forward.

• Legal action. Insurance fraud may prompt civil suits or criminal charges in some cases.

The results can be financially devastating if you try to keep your Uber driving a secret from your insurer. Be upfront about it to avoid headaches down the road.

Uber’s Insurance Policy

Uber provides contingent liability coverage for drivers in certain scenarios. Here’s an overview of when Uber’s insurance applies:

Period 1 – App open, no trip: Covers third-party liability up to $50,000 per person for injury, $100,000 total per accident, and $25,000 for property damage. This functions if your personal policy denies a claim.

Period 2 – En route to pick up: Third-party liability up to $1 million per incident. Contingent comprehensive and collision up to $50,000 for damage to your car with a $1,000 deductible.

Period 3 – Passenger in car: Primary liability and uninsured/underinsured motorist coverage up to $1 million per incident. Contingent comp and collision up to actual cash value of vehicle with a $1,000 deductible.

Uber maintains insurance on behalf of all drivers, but it does not eliminate the need for you to carry your own rideshare-friendly policy. Their coverage has limitations and gaps.

Strategies to Keep Your Insurer in the Dark

While being dishonest with your insurance provider is risky, some Uber drivers still wonder if they can keep their rideshare driving under the radar. Here are some things they try:

• Only driving sporadically or part-time for Uber.

• Using a car separate from their personal insured vehicle.

• Removing Uber/Lyft stickers and signs before filing insurance claims.

• Lying or omitting rideshare info when buying new policies.

• Claiming they were “just giving a friend a ride” if in an accident while driving for Uber.

These strategies are considered fraudulent. If uncovered, drivers face serious financial and legal consequences. The rewards are not worth the immense risks.

The only surefire way to protect yourself is being open about rideshare driving with your insurer. This allows you to get the right coverage without hiding anything.

State Laws on Rideshare Driver Insurance

Laws on insurance requirements for rideshare drivers vary by state. Here are some notable regulations:

• California: Insurers cannot cancel a policy solely because the driver works for a rideshare company. Uber/Lyft must provide primary insurance when a ride is booked up to $1 million.

• Colorado: Auto policies cannot exclude coverage solely for rideshare driving. Uber/Lyft must cover drivers during Period 1.

• Florida: Insurers can exclude rideshare drivers and deny claims unless additional coverage is purchased.

• New York: Uber/Lyft drivers are required to obtain special for-hire vehicle insurance.

• Oregon: Rideshare drivers must meet state financial responsibility requirements based on number of rides given.

Check your state’s specific statutes regarding rideshare insurance mandates. Some states offer more driver protections than others.

FAQs About Uber Driving and Auto Insurance

Here are answers to some frequently asked questions:

Will my insurer automatically know if I drive for Uber part-time?
Not necessarily. But periodic checks or an accident could reveal your undisclosed rideshare activity.

Can my insurer drop me if I get in an accident while driving for Uber?
Yes, they may terminate your policy and deny the accident claim if you violated terms.

Does Uber’s insurance fully protect me as a driver?
No. There are coverage gaps and Uber’s insurance is contingent on your personal policy denying a claim first.

What’s the best way to get proper rideshare coverage?
Purchasing a rideshare endorsement/rider on your existing policy is often the most convenient and affordable option.

If I lie to my insurer about driving for Uber, how likely am I to get caught?
Highly likely. Insurance companies thoroughly investigate claims. Uber may also be required to disclose your driving history.

The Bottom Line

Driving for Uber without informing your auto insurance provider is very risky. While Uber itself does not proactively tell your insurer, accidents and insurance investigations can still reveal your undisclosed commercial driving.

Make sure to be upfront with your insurer and obtain proper rideshare coverage. This is the only way to protect yourself from insurance gaps, denied claims, and canceled policies down the road. Shop for rider policies and speak with an agent to get appropriately insured before accepting trips through Uber.