What are the Insurance Policies?
As a ridesharing company, Lyft has different policies when it comes to insurance.
Ridesharing companies, like Lyft and Uber, have three periods that they consider.
- Period 1: When the driver is cruising around, logged in on the Lyft app, but haven’t connected with a rider yet.
- Period 2: When Lyft has already matched the driver with a rider and the driver is on the way to pick up the passenger
- Period 3: The rider is already in the car. Period 3 ended when the rider arrived at their destination.
Insurance policies depend on the period that the accident happened. If you encountered an accident as a driver of a Lyft vehicle, proof of coverage from your personal plan is sufficient.
If you spend more time on the road, the more likely you are to have an accident. If an accident happens, it is best to know which insurance company is going to cover the damage.
What Lyft’s insurance covers
Lyft carries liability coverage for drivers. The coverage depends on whether a passenger is in the car or not. Here is a preview of what Lyft insurance covers:
Period 1: Liability limits are low. Comprehensive and collision coverage are not covered.
Liability: Lyft’s liability coverage has limits $50,000 per injured person, up to $100,000 per incident, and $25,000 coverage for property damage. This is contingent coverage in all but two states, California and Maine. Contingent coverage means that you have to claim on your insurance policy first. If in case that the claim is denied, Lyft’s coverage will apply.
Collision and comprehensive: During Period 1, Lyft does not offer any collision or comprehensive.
Uninsured/underinsured motorist: Lyft does not offer this coverage during Period 1. If you get into an accident with another driver who is uninsured or who is underinsured, you will need your own uninsured motorist policy or health care coverage for your injuries.
Periods 2 and 3: Liability coverage is high, but collision and comprehensive is the only contingent
Liability: Lyft carries a $1 million liability policy.
Collision and comprehensive: Lyft has a comprehensive and collision for its drivers during Periods 2 and 3, but the coverage is contingent. This means that you need to claim your personal collision and comprehensive policy. If the insurance company denies the claim, then Lyft will provide the necessary insurance.
Uninsured/underinsured motorist: Lyft has a $1 million policy that could cover everything that is needed.
If you plan on being a Lyft driver, it is best to have a commercial livery policy or a rideshare-friendly policy. If you have failed to secure the two, the only times that you can count on your personal insurance is when you are driving for personal reasons and do not have the Lyft app open.
To be fully protected, it is best to have a commercial insurance policy. Expect to pay around $5,000 to $8,000 annually for professional level coverage. The rise of the ridesharing companies prompted insurance companies to have rideshare-friendly policies.
Tips to Ensure Sufficient Coverage
According to a 2018 survey of 1200 ridesharing drivers, 46.5 percent of respondents said that they purchased rideshare insurance. Another 46.8 percent said that they have not, and the rest declined to comment.
Some drivers may not be aware that they need special rideshare coverage to drive. They might think that their personal insurance is enough. They need to know that they have to update their personal insurance about the gig they have with the ridesharing companies.
With this, only 55 percent have notified their insurance companies that they are a rideshare driver, while 28 percent did not update their insurance companies. The rest declined to answer.
If you are a passenger in a Lyft car and an accident happened, it is best to consult a personal injury lawyer about the incident.