The Best Rideshare Insurance? We Review USAA, Farmers, Erie, and AAA

The number of rideshare drivers on the road in the US alone has surpassed the millions. This wave of delivery services is not going to stop anytime soon. currently, there are 57.3 million gig workers hustling to make more money day in and out. This means that basically every one-in-three employable adults has a side gig.

Rideshare driving as a side-gig or even as a business has grown quite quickly. Currently, there are more than 1 million Uber drivers in the US. After listening to a recent podcast on Pivot, the Lyft founder said that there are 1 million Lyft drivers in the US as well.

These rideshare jobs are great for those who like to be self-employed. Working as a rideshare driver comes with its own set of conditions. Not talking about the other ones, insurance is one of the main components you need to consider. 

Your personal auto insurance isn’t enough. You need a separate commercial auto insurance policy if you’ll be using your car or any other vehicle for rideshare services. 

When talking about rideshare, Uber and Lyft are the first names that come to mind. While there are other rideshare companies, they all have more or less similar requirements for auto insurance. 

So, when we refer to Uber or Lyft in sections ahead, there are high chances that your company also has similar conditions. 

Best Rideshare Insurance To Choose From

USAA

The United Services Automobile Association or USAA provides gap coverage. This insurance protects you while you're waiting for a rideshare request on your ridesharing app. 

Gap coverage refers to the time between travels as well as any gaps in your overall insurance coverage. This approximately correlates to the “available” part of a ridesharing trip (and, in some cases, the “en route” stage).

Note that USAA insurance is an extended version of the protection policy. Along with your personal insurance, you’ll also need to get commercial insurance from Uber or Lyft and, added to it, gap coverage. 

With this, you’ll be covered at all times (in all three ridesharing periods) and while driving the car for personal use. 

Why Choose USAA?

One benefit of USAA is its affordability. At only $6 per month, the rideshare drivers can get coverage for Period 1. 

It has broad coverage in the country. Barring only a few states, you’ll find USAA rideshare insurance in almost every region. 

USAA rideshare insurance has received A++ financial rating from A.M Best and a AAA rating from Standard and Poors. 

Covered States

Why not Choose USAA?

USAA is only available to military personnel. This means that you need to be a USAA member to get this insurance. Only active members of the military, veterans, their spouse and children can get rideshare insurance with USAA. 

Farmers

Farmers rideshare insurance works similarly to USAA. Their insurance policy kicks in during Period 1, and you have to get an extended version of the same over your personal auto insurance. 

This means that along with your personal insurance, you can add gap coverage. Farmers insurance does not replace your personal auto insurance.

Why Choose Farmers Insurance?

Farmers rideshare insurance offers gap coverage at a 25% surcharge on your existing policy cost. Farmer's also has a rental car/loss of use option.

They will provide you with a rental vehicle or a specific amount per day for a period of time if your car is out of operation.

Of course, there are limits, but it's a nice perk to have in general. Farmers has received an A financial rating from A.M Best. They were also the first ones in the industry to provide rideshare insurance. 

Covered States

Why Not Choose Farmers?

Farmers rideshare insurance is not available in every state, which makes relocating with this insurance policy complicated. At present, only 16 States and the District of Columbia are covered, which leaves a majority of the US states outside their coverage areas. 

Erie

Erie came up with a new solution for every rideshare driver back in 2014, and they are still operating with the same policy.

They provide complete coverage for all periods, so their service is marketed as a first-of-its-kind rideshare coverage. 

Your personal car insurance policy gets a "business usage" designation with Erie's ridesharing insurance. Erie rideshare insurance also covers the gap between your personal policy's deductible and TNC's coverage deductible. 

In some states, Erie's personal insurance policies feature various perks that would typically cost extra with other insurers, such as first-accident pardon after three years of good driving.

Why Choose Erie?

Erie offers additional coverage to your personal auto insurance policy for all three periods. This means that when you are not driving for Uber, Lyft, any other rideshare service, your personal insurance policy applies. 

It also includes roadside assistance and compensation for rental cars. Erie rideshare insurance has some additional benefits like Free locksmith services (up to $75) and no deductibles for glass repairs. 

These perks are included in your comprehensive coverage. In addition, your collision insurance protects personal belongings (up to $350) in the event of an accident.

Even though Erie has a lower financial rating than the national average, it has a high customer satisfaction rating. Plus, you can get full coverage with this insurance provider. 

Erie offers discounts like Youthful Driver and Bundles Policies, along with some extra perks on your insurance policy. 

On average, the Erie rideshare insurance costs $10/month, which is pretty awesome for the kind of coverage it provides.

Covered States

Why Not Choose Erie?

Erie has the same issues as Farmers. It does not cover a lot of States in the country. As you can see above, Erie’s rideshare insurance is limited to the eastern side of the country. 

Erie covers the vehicle for all three periods, but doesn’t supplement rideshare insurance with personal insurance. 

As customers pay an extra $10 for all three periods, Erie could have made rideshare insurance the primary coverage and Personal insurance coverage as an add-on. 

Also, you cannot get Erie rideshare insurance without contacting an Erie insurance agent or a third-party consultant. 

AAA

AAA rideshare insurance comes as an add-on to existing insurance coverage. You cannot get this insurance directly. Their insurance is accessible only through some regional clubs. 

Similar to the majority of the insurance companies, AAA also provides rideshare coverage as an add-on to your existing personal auto insurance policy. 

AAA does not publish the cost of its rideshare endorsement.  

To find out if ridesharing coverage is offered in their state, drivers should contact their local AAA club.

AAA is not a single company. It is a consortium of different organizations joined together. They cater to different services and offerings, out of which auto insurance is one. A.M Best gives an A financial rating to AAA Insurance. 

Why Choose AAA?

AAA rideshare insurance benefits are not very clear. That’s why we had to resort to getting opinions from some of their current users. Those who are members of the AAA club benefit from some of the discounts on offer. Discounts like Paperless and Autopay bring the premium down further.  

AAA auto insurance is highly affordable for its members.

Covered States

As there are several companies and clubs that make up the larger AAA insurance group, we cannot list the states for every club. Hence, the map below shows the states covered by one of the largest groups under AAA, CSAA.

Why Not Choose AAA?

The apparent reason is the club membership requirement. AAA rideshare insurance is only available to members of the clubs in the group, so it may not be accessible for everyone. 

These were the four rideshare insurance companies that have been in the news lately, and that’s why we decided to review them. 

While you are looking for the best rideshare insurance services, make sure to look at their availability in your state as well as their coverage. Even if an insurance provider works in one of the States, it may not be available in every county. 

So, be sure to check which areas are covered by your insurance provider.

While you are selecting the ideal rideshare insurance provider it's better to understand the type of insurance policies they have to offer. Read ahead to know more about them.

Types of Rideshare Insurance Policies

Yes, there isn’t a single type of Farmers or Erie insurance rideshare. These companies offer different types of policies. Knowing the difference is imperative. Let's get these covered first, and then we’ll move on to reviewing different rideshare insurance policies. 

Understanding the insurance details is a tricky part for a layman. There are several aspects that you can easily miss out on. For instance, there is a provision to extend your existing personal insurance. However, if you don’t have collision coverage on your existing personal policy, it won’t be extended to endorsement coverage by default. 

Endorsements in terms of insurance are the amendments and additional covers made to the existing policy. This means that even if you have personal insurance endorsements as well as an Uber or Lyft insurance policy, you won’t be covered in if there’s an accident while you are waiting for someone to make a request. 

Here are a few types of insurance policies every major company offers;

• Additional Protection: While using your ridesharing service online, an insurance company may offer you additional protection (typically in the form of "gap coverage"). These types of policies generally account for what isn't covered by Uber or Lyft's commercial coverage.
  

• Extension of Personal Insurance Coverage: Some insurance carriers require rideshare drivers to extend their personal insurance coverage to specific phases of the ridesharing trip. These plans are frequently included in the driver's personal insurance policy with the same company.
  

• Hybrid Insurance Package: These policies are designed to substitute your existing personal auto insurance with a rideshare-friendly plan.
  
  

Uber and Lyft Offers Auto Insurance | Why Should I Switch?

Uber and Lyft offer rideshare insurance but their policies are not enough. Plus, they include a ton of rules and regulations that must be fulfilled before you can claim coverage from them.

Their auto insurance for Uber and Lyft drivers is incomplete, because they do not provide coverage for Period 1. Their insurance kicks in during Period 2 and Period 3. Details about these periods will be provided towards the end of the article. 

Let's go over what the periods are again! Period 1 is when you are waiting for a rider. Period 2 is when you are going to pick up your rider, and Period 3 is when you are driving with the rider in the backseat. 

So, if you get into an accident during Period 1, you won’t have any support. Uber and Lyft insurances do not apply during this period, and your personal auto insurer won't be liable.

You can, however, say that you were not logged in. 

We have had this advice heard from several Reddit users, but it’ll only cause more problems if you are caught. So, we would not recommend taking this road. If you want to secure your car and health, it's important to get the right insurance plan. 

Another disadvantage of getting Uber and Lyft insurance is the collision deductible. Uber charges $1000, and Lyft charges a $2500 deductible. Some of the insurance companies cover you during Periods 2 and 3 along with Period 1. So, you won’t have to pay the deductible to your rideshare company. 

Insurance that covers every period of rideshare driving is available. We will be reviewing some of the major firms like farmers insurance rideshare, among others, to help you decide. 

‍How to Buy Rideshare Insurance?

If only this process were as easy as buying auto insurance. Because of some uncertainties, it is difficult to be sure of the rules and regulations associated with every insurance provider. 

So, please check on these points before buying rideshare insurance. 

• Will you be adding other policies to your auto coverage, such as homeowners or renter’s insurance? If this is the case, you may be able to save money.
• Contact all of the insurance agents in your area.
• Always compare the rates, perks, discounts, deductibles, etc., offered by insurance companies.  
• Make a list of what you want in your insurance coverage.
• Check for any sort of loopholes in your policy. 
• Look at the benefits that set organizations apart.
• Make sure your agent knows you're a rideshare driver. 

Conclusion

Getting rideshare insurance for your car is essential if you want to avoid losing your savings in case of an accident. While some rideshare companies offer company-provided insurance policies, they do not cover you while waiting for a rider. 

As a result, you will not really be covered, which isn't suitable for business. The majority of the auto insurance companies provide gap coverage, which covers aspects not covered by your personal auto insurance policy. 

The insurance companies listed above will cover that gap at an extra cost. The final cost and how much cover you’ll get depends on the provider. So, make sure to understand the offerings and align them with your requirements before signing anything.