ORLANDO, Fla. — Drivers for rideshare companies, such as Uber and Lyft, are required by Florida law to have insurance coverage whenever the rideshare app is on. All vehicle owners are also required to carry a minimum amount of car insurance.
The minimums for all Florida drivers are $10,000 in personal injury protection (PIP) insurance and $10,000 in property damage liability (PDL) insurance. However, Florida has an additional law that requires rideshare drivers to carry at least $1 million in liability coverage for property damage, physical injury, and death. They must also carry the PIP insurance minimums that apply to all drivers. Even when an Uber or Lyft driver isn’t actively driving a passenger, they still must have $50,000 in physical injury or death liability coverage that applies anytime a driver has the app on to look for a customer.
Transportation Network Companies (or TNC) in Florida generally meet the State’s requirements for rideshare insurance, drivers may also want to purchase their own policies for other reasons like higher liability limits when no passenger is present, and it can reduce the driver’s deductible to pay if their car was damaged.
If a driver purchases a rideshare insurance policy or adds a rideshare endorsement to their personal auto insurance policy, there are four stages during which coverage can differ.
Period 0: A driver's personal auto insurance covers them while they're driving and the app is off, as this is considered standard personal use.
Period 1: While the rideshare app is on and the driver is waiting to be paired with a passenger, their personal rideshare insurance would provide coverage. A limited amount of liability coverage is also provided by the rideshare company, such as Uber or Lyft.
Period 2: The rideshare company's auto insurance is typically in force while a driver has been paired with a passenger and is on their way to pick up the person. During this time, some personal rideshare insurance policies extend coverage as well.
Period 3: Once a passenger is in the car, the rideshare company's commercial auto insurance is in force. After the passenger has been dropped off, you return to Period 1.
Most rideshare companies voluntarily provide generous insurance policies for their drivers. For example, Uber includes insurance for all of their drivers in amounts that coincide with Florida law, and they also provide a $1 million insurance policy for liability to any third party because of an accident. Also, they offer insurance for their drivers in case they’re the victim of an uninsured or underinsured motorist. The $1 million policy applies when a driver has a passenger or when they’re on their way to get a passenger. When the driver is looking for a passenger, the lower insurance maximums apply.
Uber and Lyft, both, may provide comprehensive and collision coverage as well during Periods 2 and 3, but their policies typically have deductibles of at least $1,000. Also, in order to qualify for this coverage, Uber and Lyft require that you have your own comprehensive and collision coverage. If you want full coverage during all periods and greater liability coverage during the times you don't have a passenger, you'll need rideshare insurance to supplement these policies.
Feel free to give us a call for a free consultation if you are planning to join the Sharing Economy anytime soon.