If you drive for Lyft, understanding the insurance coverage provided by the company is crucial. Like Uber and other rideshare services, Lyft offers different levels of coverage based on the phase of your trip. However, gaps in coverage can leave drivers financially vulnerable. Here’s what you need to know about Lyft’s insurance and how to protect yourself.
Phase 1: When the App is Off
When your Lyft app is off, your personal auto insurance is the only coverage that applies. This means that if you get into an accident while commuting or running personal errands, Lyft provides no protection. It’s vital to have comprehensive personal insurance, including uninsured and underinsured motorist coverage. Without it, you could be stuck paying for medical bills and car repairs out of pocket if the at-fault driver has inadequate insurance.
Many drivers make the mistake of carrying only the state minimum coverage, which often isn’t enough. For example, if you have only $15,000 in liability coverage and the accident results in significant injuries, you might be financially responsible for the excess costs. Ensuring that you have at least $100,000 to $250,000 in uninsured or underinsured motorist coverage can provide critical protection.
Phase 2: App is On, Waiting for a Ride Request
Once you turn on the app and wait for a ride request, Lyft provides some coverage, but it has significant limitations. The company offers third-party liability insurance, covering up to $50,000 per person, $100,000 per accident, and $25,000 for property damage. However, this phase does not provide coverage for your injuries or vehicle repairs if you are hit by an uninsured or underinsured driver.
Additionally, Lyft’s insurance does not include comprehensive or collision coverage unless you have personal rideshare insurance. In case of an accident during this period, you might have to rely on your own coverage, which is why supplemental rideshare insurance can be beneficial.
Phase 3: En Route to Pick Up a Passenger or During a Ride
Once you’ve accepted a ride and are en route to pick up a passenger or are actively transporting one, Lyft’s insurance offers the most protection. This includes:
- $1 million in third-party auto liability coverage
- Uninsured/underinsured motorist coverage (varies by state)
- Contingent collision and comprehensive coverage (with a deductible, usually around $2,500, and only if you have similar personal coverage)
This phase provides better protection for both you and your passenger. However, it is still subject to policy terms, and claims can sometimes be delayed by the insurance company. Having an attorney who understands rideshare insurance can help navigate potential disputes.
Additional Considerations: Prop 22 and Health Insurance
In California, Proposition 22 provides additional coverage for medical expenses and lost wages if you are injured while driving for Lyft. However, it does not cover pain and suffering or long-term damages, making personal health insurance an essential safeguard.
If you drive for Lyft, it’s advisable to consult with an insurance broker to explore additional coverage options. Having a solid insurance plan ensures that you’re protected in all phases of your rideshare journey.
For any questions about rideshare insurance or legal assistance, feel free to reach out to a professional who specializes in this area.
