Coronavirus and Rideshare Insurance: Everything You Need to Know

Fact-checked with HomeInsurance.com

In a matter of weeks, COVID-19 has changed the way the world goes to work. The ripple effects of these changes can be felt across every industry. For rideshare drivers, the cost of maintaining insurance during a time when there’s not nearly as much work to be claimed is a major financial burden. Thankfully, insurance companies recognize that your income has likely taken a hit in the wake of this pandemic and they are offering solutions. If you’re a professional driver who has lost out on work over these past few weeks, you have some options when it comes to your rideshare insurance. Here’s what you need to know regarding driving for Uber and Lyft during these difficult times. 

Can I lower my monthly payments?

There are a few options for Uber and Lyft drivers to save money on rideshare insurance without impacting coverage. However, the best route for you depends on the degree to which the coronavirus has impacted the amount of driving you are currently doing. 

It’s worth your while to check in with your state’s department of insurance website. Depending on where you live, your state may be taking action to help ease the financial impact you are feeling as a result of the COVID-19 outbreak. For example, a visit to the California Department of Insurance site reveals that on March 18, 2020, the department issued a notice requesting all insurance companies to provide policyholders with at least a 60-day grace period to pay their premiums. 

Specific to auto insurance, it announced: “On April 13, 2020, Commissioner Lara and the Department of Insurance ordered insurance companies to return premiums to consumers and businesses paid for at least the months of March and April — including the month of May if ‘shelter in place’ restrictions continue — in at least six different insurance lines: private passenger automobile, commercial automobile, workers’ compensation, commercial multi-peril, commercial liability, medical malpractice, and any other insurance line where the risk of loss has fallen substantially as a result of the COVID-19 pandemic.”

Connecticut’s Insurance Commissioner Andrew N. Mais issued a similar proclamation on March 20.

A quick review of your coverage can also reveal a path to lower costs. Increasing deductibles or decreasing limits will save you money on your monthly premium. Your carrier should have a tool on its website that lets you adjust these variables and immediately see how it impacts the amount you are paying.

Should I change my rideshare insurance coverage?

As you know, both Lyft and Uber provide additional auto insurance to augment your own personal coverage. The company coverage kicks in when you click the app to go into ridesharing mode. Neither Lyft nor Uber has indicated any changes to this coverage requirement during the coronavirus outbreak.

If your Lyft and/or Uber activities are entirely on hold, it is worth investigating the option of temporarily pausing your ridesharing coverage. Geico, for example, offers this: “You can easily switch to a GEICO personal auto policy. You’ll just need to send us proof that you’ve stopped ridesharing or driving for on-demand deliveries. A deactivation email from Uber, Lyft, or a similar service counts as proof.” 

Other options

Even if you are still driving, there are ways to cut costs. If rideshares have decreased, then your mileage should also be significantly lower. Insurance companies will typically offer premium discounts based on overall miles accumulated during a year — the fewer driven, the bigger the savings. 

Another option to consider is using your rideshare driver status to make a difference. On April 15, 2020, Lyft announced the launch of Essential Deliveries, a pilot initiative that allows government agencies, local nonprofits, businesses and health care organizations to request on-demand deliveries by Lyft drivers of essentials such as meals, groceries, life-sustaining medical supplies, hygiene products and home necessities.

Similar to the way ride requests work, Essential Deliveries shows up on your app, with “Delivery” listed as the ride type. If you accept the gig, you’ll receive instructions from the organization about where to pick up the package. There will also be drop-off details. Deliveries will never require any contact with the recipient.

Essential Deliveries not only offers you a way to earn, but it also doesn’t require any adjustment to your coverage.

“We know that some auto insurers are allowing private-passenger policyholders to use their vehicles for commercial purposes such as delivering food, medicine and other essential goods at no additional charge,” says Scott Holeman, Director of Media Relations at the Insurance Information Institute (III), an industry association with more than 60 insurance company members. “We suggest talking with your agent or insurance company to learn about what options are available. You may also want to shop around to compare coverage pricing.”

Washington state’s Office of Insurance Commissioner is providing a list of companies that have issued endorsements for special delivery driver coverage during the COVID-19 pandemic. But it also cautions: “The endorsement applies only to delivery drivers for retail and service operations during the pandemic and Washington state’s Stay Home, Stay Healthy order. It doesn’t apply to people who drive for other commercial reasons, including rideshare or any commercial delivery businesses. The endorsement remains in effect as long as the emergency order is in place.”

Are insurance companies offering to help?

The good news is that cost savings are already in the works without you needing to do anything. Insurance companies appreciate what’s happening and they want to help. Fewer cars on the road and a major reduction in miles traveled has reduced the number of auto accidents and claim payouts. Many major insurers are passing on some of that savings to their customers. 

The III estimates customer paybacks will be substantial.

“Insurers are again fulfilling their role as economic first responders by providing financial relief to customers when they need it most,” III CEO Sean Kevelighan said in an April 13, 2020 post on the organization’s blog. “If the rest of the nation’s private-passenger auto insurers are as generous as the companies the Triple-I knows about, we project insurers will be giving customer refunds, discounts, dividends, and credits totaling $10.5 billion.” 

A recent story from Consumer Reports states that Liberty Mutual, Safeco, Allstate and Geico have announced a 15% reduction in auto premiums for April and May. Amica and USAA are promising premium savings of 20% percent for the same period. Farmers and 21st Century policyholders can expect a 25% decrease in their April bill. And that means more money in your pocket.

Whether you’re driving less, stopping altogether or switching to special deliveries, savings can be had to help ease the impact of the coronavirus on your ridesharer days.

Experts cited

Scott Holeman

scott holeman

Scott Holeman is Director of Media Relations at the Insurance Information Institute (III). Prior to joining III in 2019, he served as Communications Director for the National Association of Insurance Commissioners (NAIC), where he led media and consumer education efforts that generated 6 billion+ in audience impressions through public service announcements, news releases, consumer alerts and social media campaigns.

 

 


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At the Simple Dollar, we have been following COVID-19 since the start. Check out the articles below for resources and the latest news on financial relief from the coronavirus.

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