Zaneta Wood, Ed.S. has over 15 years of experience in research and technical writing bringing a keen understanding of data analysis and information synthesis to reach a wide variety of audiences. She studied adult education and instructional technology at Appalachian State University as well as technical and professional communication at East Carolina University. Zaneta has prepared technical p...

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insurance...

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Reviewed by Leslie Kasperowicz
Farmers Insurance CSR 4 Years

UPDATED: Jul 14, 2021

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Important facts to know...

  • Anyone driving for Uber is involved in a commercial activity and needs the appropriate insurance
  • Procuring a significant amount of liability insurance is necessary when hoping to avoid financial losses
  • Expanding insurance to cover personal injury, collision, and more adds more protection

The ride-sharing service, Uber, and companies similar to the service present a unique way for people to make money on a part-time or full-time basis.

Self-determined work shifts can be booked 24/7 meaning working for Uber can be lucrative. Those willing to put in a lot of hours could make huge money.

Uber work, however, could set the stage for financial ruin when the driver does not purchase the right insurance policy. As far as insurance companies are concerned, an Uber driver is someone who is exposed to significant risk.

An Uber driver can be the most responsible person on the road. He or she has to be since Uber’s hiring team directs a critical eye at the driving record of anyone driving for the company.

Regardless of how safe a driver the affiliated freelancer is, he or she is engaged in business with the vehicle. The risks such a driver is exposed to are greater than normal use of a car. So, car insurance rates are going to be higher than non-commercial ones.

Compare car insurance quotes today to make sure you find the best rate for the coverage you need.

Personal vs. Commercial Insurance

Personal car insurance is intended for drivers who are not using their vehicle to engage in business activities. Commercial insurance is designed to cover someone who is using a vehicle for business purposes.

Picking people up and taking them to a destination for money is absolutely a form of business use of a vehicle.

Someone using a personal insurance policy while taking customers on rides while employed for Uber is, for all intents and purposes, looking at finding his or her claim denied if an accident occurs.

The policy simply would not be the appropriate one for the intended use of the car. Hence, the insurance would not be valid.

Revising a current insurance policy to reflect commercial use is not all that tough. Simply contacting the insurance provider and asking for the policy to be altered is all that is needed. If the cost is a bit higher than expected, comparison shopping may be worth doing.

Getting the best policy in place is definitely recommended. Otherwise, the driver would be left in a terrible situation if he/she was responsible for injuries or damages when driving for Uber.

Liability insurance helps address disaster scenarios since it assists with protecting against losses.

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The Basics of Liability Insurance

As the name suggests, liability insurance covers the costs of damage inflicted by a driver onto others when he/she is at fault.

The vast majority of states require a minimum amount of auto liability insurance in order to register a vehicle and to legally drive.

Personal liability insurance minimums are set very low. Such is not usually the case with commercial auto insurance. The minimums are higher due to the increased risks.

Uber has crafted a unique liability policy intended into effect when a driver is working on the road. Uber also presents insurance “between trips.” Uber still requires drivers to purchase personal insurance in order to work for the company.

Drivers may presume their standard, personal, non-commercial auto policy is in place when working for Uber.

Actually, the insurance company that sold a premium to the driver might not be pleased to learn the driver was working for Uber and never requested a policy upgrade.

A policy could end up voided when the insurance company is not fully aware of the insured’s commercial activities.

There’s no reason to end up in such a terrible situation. Comparison shopping for a solid personal/commercial auto policy could lead to acquiring good savings on exceptional coverage.

Insurance policies can be written to cover both personal and personal use. In California, Combined Single Limit (CSL) policies for commercial auto insurance contracts can reach upwards of one million dollars.

Going Beyond the Minimum

Those thinking about buying the minimum must realize that a person injured in an accident could sue beyond the minimum amount. The following are some suggestions:

  • increase liability
  • consider personal injury protection
  • add an umbrella policy

A person who owns a $200,000 home and only $25,000 in liability insurance is going to have a tough time getting someone to settle for just the $25,000. The home reflects assets. Upping insurance upwards of $500,000 or more may be wise.

While liability protection refers to harm caused to others, drivers may wonder if it is possible to take liability insurance out to protect themselves? The answer might very well be yes.

Certain policies may even allow for buying personal injury protection liability insurance, which is also known as no-fault automobile insurance. In the state of New Jersey, this type of insurance is mandatory.

This coverage would allow a driver to cover him or herself when injured in an accident due to his/her own fault. Taking out an extra $250,000 in injury insurance to protect oneself may be advisable for those worried about their financial well-being.

To acquire such coverage for, perhaps, $99 per six months definitely is a good deal.

And the option does exist to go further and purchase an umbrella policy to add $1 million or more beyond the maximum of the auto insurance policy. Not everyone thinks about maxing out their liability insurance, but they should.

The purpose of insurance is not to just settle the specifics of a state’s legal requirements for registration and legal vehicle driving. They need to purchase the insurance to protect their own financial assets and avoid ending up in bankruptcy court.

Acquiring a great insurance policy that covers liability in all its forms could be done rather effectively by simply performing necessary comparison shopping.

Online requests to review quotes could lead to procuring a fantastic policy with solid liability coverage and at a reasonable premium price.

Going Beyond Liability Coverage

Being an Uber driver means traveling all around time, often during rush hours or on weekends, and dealing with all the many unexpected hazards on the road.

The risk of damaging one’s own vehicle is always a possibility. Repairs to the vehicle mean no working for Uber and earning no money and also paying money for repairs.

Consider the following types of insurance coverage:

  • comprehensive
  • collision
  • uninsured motorist

At least with comprehensive and/or collision coverage, damage inflicted upon the vehicle will cover repairs minus the deductible. Also suggested is to look into uninsured motorist coverage.

An accident involving an uninsured motorist could prove incredibly disastrous. The Uber driver and passengers could end up seriously injured. The car, a vehicle necessary for the driver to make a living, might be totaled.

Since the person who caused the accident has no insurance, only a lawsuit targeting the person’s assets would be a possible, and very long and costly, approach to recouping any money. Even then, the person might have no assets to speak of.

Paying a nominal annual fee to acquire uninsured motorist coverage could provide the necessary protection from such financial disaster.

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Boosting Coverage

Uber drivers may go years and years without ever having to file a claim, which is fantastic. In addition to avoiding the hassles associated with accidents, not filing a claim likely opens the door for saving money on insurance policies.

Accidents do have a tendency to happen without warning. Don’t let years of “clean driving” create the impression nothing is going to go wrong. Make sure appropriate levels of insurance are in place.

Look right here for the best rates and the best coverage. Begin by entering your zip code below.