Do You Need Rideshare Car Insurance?

Do You Need Rideshare Car Insurance?

Written by Priyanka Correia
Fact-checked by Caitlin Wood
Last Updated May 3, 2021

Ridesharing companies like Uber and Lyft have become incredibly popular over recent years, providing Canadians with a convenient alternative to traditional taxis. They’re seemingly everywhere, making it easy to find a ride anywhere you happen to be with a few clicks on your mobile device. And within minutes, your ride will be pulling up curbside to take you wherever you need to go. 

But not only are rideshare programs convenient for people who need a lift, but they’re also providing employment opportunities for those looking for a side gig that offers plenty of flexibility. If you have a qualified vehicle, you could be making some decent money, whether supplemental to your main income or as a full-time job. 

As a rideshare driver, however, you’ll need to ensure adequate insurance on the road. You already have auto insurance on your car as required by law, but the question is, do you need additional insurance to cover you while you’re carrying other passengers around?

Rideshare car insurance is a unique type of coverage that you may want to consider adding to your own personal auto insurance policy. 

What Is Rideshare Car Insurance?

Rideshare care insurance offers extended coverage on your auto insurance policy when you are employed with a rideshare service, such as Uber or Lyft. With this type of policy, you will be covered while you are driving, both before you’ve accepted a ride and up to its cancellation. 

While your regular car insurance policy is required to drive your car on the road, you’ll need additional insurance if you drive your car to earn money. That’s because there are additional risks that come with working for rideshare companies. For example, there is a higher risk of interior damage done to your car by passengers you pick up. 

There’s also an increased risk of car accidents since you’re on the road a lot more than you may have been if you were using your vehicle for personal transportation. And there are more parties involved in the event of a car accident, which can make filing and settling a claim more complicated. 

For these reasons, having a rideshare auto insurance policy in place may help provide adequate coverage while working for a rideshare company. 

If you are involved in a car accident while you’re on the clock, your car insurance policy will likely not cover you. And if your insurer discovers that you did not inform them of your participation in a rideshare program with your insured car, you risk having your policy cancelled altogether.

Is Rideshare Insurance Mandatory When Driving For A Rideshare Company?

You may still be able to work for a rideshare company like Uber or Lyft without a rideshare auto insurance policy in place. However, you will still be required to have personal auto insurance on your car in your province. 

You will also need to verify whether or not your auto insurance company will provide coverage while you drive for a rideshare company. If not, you may need to add rideshare insurance to your personal policy. 

What Requirements Are There For Personal Auto Insurance When Driving For A Rideshare Company?

Every driver in Canada requires third-party liability auto insurance when driving on the road. However, if you drive for a ridesharing company, you will also need to take out a comprehensive policy. Rideshare coverage can only be added to a policy with comprehensive coverage, so you will need this type of policy anyway. 

How To Choose Rideshare Auto Insurance

When picking a policy, be sure to take the following into consideration:

Increased Liabilities

A rideshare auto insurance policy should cover the heightened liabilities that you will be at risk for as a rideshare driver. The policy should either provide separate coverage for the passengers you pick up, or a higher coverage amount than your personal auto insurance policy to ensure adequate coverage. 

Collision Coverage

Ridesharing insurance policies should provide the coverage needed for a conventional policy, which ideally would include collision coverage. 

Deductible Amount

Like any other type of insurance policy, it’s important to consider the size of the deductible you wish to make before your policy kicks in after filing a claim. Higher deductibles mean lower premiums, while lower deductibles mean higher premiums. 

Repair Coverage

Ridesharing increases the risk of your vehicle being damaged by passengers and will increase the mileage put on your vehicle. All of this can cause a lot of wear and tear on your car a lot faster than if you were using your vehicle for personal purposes. Your rideshare auto insurance policy should cover these repairs so you don’t have to pay out of pocket. 

Do Rideshare Companies Provide Insurance?

Your rideshare company should provide supplemental insurance when you are on the clock. That said, you may want to look into your particular rideshare company’s policy. 

For instance, you may be offered liability insurance to a third party and drivers who are not insured motorists, but not yourself or your vehicle. In this case, having comprehensive insurance with your personal insurance policy will help top-up coverage. 

Rideshare auto insurance policies will only kick in when you are working and not when you are using your vehicle on personal time. 

Generally speaking, your own personal policy will kick in before the rideshare company will cover anything in certain scenarios. If you want to ensure proper coverage, you may want to buy an extension on your current insurance policy. That said, each province has its own specific rules governing rideshare insurance. 

Costs Of Rideshare Insurance

Generally speaking, it can cost you an additional $5 to $20 on top of your regular insurance every month to add rideshare coverage. 

Where Can You Get Rideshare Insurance?

You can get rideshare insurance from most major insurance companies in Canada. You may also want to deal with an insurance broker who sells rideshare insurance or use an online aggregate service that will produce a list of insurers who offer these types of policies, as well as the rates they offer and the type of coverage they provide.  

How To Buy Rideshare Auto Insurance

To buy rideshare auto insurance, the insurer will require some personal information about yourself. You’ll also need to inform the insurer what you will be using your car for, how much you drive overall every year, how much you drive for a ridesharing company and information about your driving record. 

You will also be required to provide information about the car that will be used for ridesharing services, such as the model, make, year, security features, previous car accidents, and overall condition. 

You’ll then be given options in terms of the types of insurance plans available, which you will want to carefully consider. More specifically, you should pay attention to what type of coverage is offered to pay for damages in addition to collisions, deductibles, and the amount of liability coverage that’s provided.

Once approved, you’ll be given approved documents as proof of coverage which you will want to carry with you when you drive. 

Check out how you can save money on your auto insurance policy

Will Rideshare Insurance Affect Your Personal Auto Insurance Policy?

Rideshare insurance will likely impact your personal auto insurance policy. Your best bet would be to speak with your current insurance company to inform them that you are using your vehicle as part of a ridesharing program. You should also ask about what the possible repercussions would be for buying ridesharing insurance and using your car for work in this capacity. 

The additional mileage that you will be putting on your car could increase the premiums you pay on your personal auto insurance policy. And the added risk that you would be taking on by taking other passengers into your vehicle could also affect your premiums. 

What Should You Do If You Need To File A Claim?

If you are ever involved in an accident while reporting for duty with your rideshare company, you’ll need to file a claim in order to be compensated for damages. Filing a claim through a rideshare auto insurance policy is much like filing a claim for any other type of insurance. Here are the steps you will need to take following an incident:

Contact The Police

It’s important that you report the accident to the police right away.

Get Information From The Other Driver(s) Involved

Exchange names, phone numbers, license plates, and insurance policy information with the other driver(s) that were part of the accident. 

Take Pictures

Take photos of damages done to your car and that of the other driver(s) to use as evidence when filing a claim. 

Call The Rideshare Company

Get in touch with the rideshare company that you work for to let them know what happened. They may have a process of filing a claim that you may be able to follow.

Call Your Own Auto Insurance Company

You may also want to let your personal auto insurance provider know about the incident in case you need to file a claim with them as well.

Final Thoughts

If you are already working as a driver for a ridesharing company or are considering getting into the business, the first thing you should do is make sure that you are adequately covered. Call your current auto insurance company to ask about what type of coverage they may offer for ridesharing drivers, and consider adding rideshare car insurance if your personal policy only provides partial coverage.

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Priyanka Correia is a Marketing Coordinator and personal finance expert at Loans Canada. Priyanka completed her Bachelor's degree in Marketing at Concordia University and has published work that has been mentioned in various news media. She is passionate about money management and educating Canadian consumers about how to take control of their financial lives.

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