Insurance Requirements for Rideshare Drivers in New York

Last Updated on July 3, 2020

Ridesharing companies such as Uber and Lyft have become a very popular way for people to make money in New York. The demand for vehicles offered by these companies is in high demand, which means that New Yorkers can make a sizeable income driving for them.

If you are interested in taking advantage of the income potential that becoming a driver for Uber or Lyft can offer in New York, you want to make sure you find out exactly what type of insurance you will need to have. Personal auto insurance policies exclude driving other people for a fee. While Uber and Lyft do offer insurance for their drivers, there are stipulations associated with the coverage they offer.

For these reasons, it’s important that you have a thorough understanding of the type of insurance you need if you are considering becoming a driver for these two popular ridesharing companies.

Why Your Personal Auto Insurance Policy Won’t Cover Ridesharing in NY

As a driver for Uber or Lyft in New York, you are using your own personal vehicle to transport passengers who use these ridesharing apps. Since you have personal auto insurance, it stands to reason that it would cover your vehicle and any mishaps that may occur while you are driving passengers, right? Wrong!

Companies that offer traditional auto insurance policies believe that rideshare services do not fit under the purpose of what you originally insured your vehicle for. Your personal insurance is only meant to cover incidents that occur when you are using your vehicle for personal reasons, such as commuting to and from work, running personal errands, or for leisure. However, as soon as you turn on your Uber or Lyft app, your vehicle is no longer being used for personal reasons; instead, it is being used for commercial purposes. You are making money by transporting people, which is considered a business. For that reason, your personal auto insurance will not cover any issues that arise when your vehicle is used for business purposes.

The reason? When you use your vehicle for commercial reasons, the risks are far greater than when you use it for personal reasons. As such, the likelihood that your insurance provider will have to pay out for a claim will be greater. Though the goal of insurance is to provide protection, companies want to pay out the least amount of money possible. From a business standpoint, it makes sense.

What Are the Minimum Insurance Requirements for Rideshare Drivers in NY?

If you’re ridesharing in New York State, you need to have the right insurance. Unfortunately, for drivers in NYC, the insurance requirements are slightly higher than those in NYS. All of NYC’s Uber vehicles, Lyft vehicles, taxis, and limousines are regulated by the TLX (NYC Taxi and Limousine Commission), which puts higher insurance limits in place.

The table below shows the insurance requirements for rideshare drivers in NYS and in NYC.

Coverage Type	Minimum Amount Required in NYS	Minimum Amount Required in NYC
Bodily Injury Liability (BIL)	$25,000 per person in a single accident $50,000 for all persons in a single accident	$100,000 per person in a single accident $300,000 for all persons in a single accident
Bodily Injury Liability (BIL) Death Benefits	$50,000 per person killed in a single accident $100,000 for all persons killed in a single accident	$50,000 per person killed in a single accident $100,000 for all persons killed in a single accident
Property Damage Liability (PDL)	$10,000 for a single accident	$10,000 for a single accident
Personal Injury Protection (PIP) / No-Fault Insurance	$50,000 for a single accident	$200,000 for a single accident
Uninsured Motorist Bodily Injury (UMBI)	$25,000 per person $50,000 for a single accident	$25,000 per person $50,000 for a single accident

Do Uber And Lyft Offer Auto Insurance in NY?

There is company-sold Uber insurance and Lyft insurance, but there are stipulations. The coverage these ridesharing companies offer depends on the “period” of a ride you are in when you pick up a customer.

There are four different ridesharing periods:

• Off duty. Your ridesharing app is turned off and you are driving our vehicle for personal reasons. Your standard auto insurance policy is in effect during this period.
• Period 1. Your ridesharing app is turned on, but you do not have a passenger. During this time, there is a gap in your insurance, as your personal coverage won’t apply, and neither will Uber or Lyft’s.
• Period 2. Your ridesharing app is on, you have a passenger request, and you have to drive to pick them up. During this period, Uber or Lyft’s insurance will cover you.
• Period 3. Your ridesharing app is turned on, you have picked up a passenger, and you are driving to the passenger’s destination. During this period, Uber or Lyft’s insurance will cover you.

The obvious period that is problematic is period 1 when the Uber or Lyft app is turned on, but you have not been matched to a passenger. Since your vehicle is technically in “commercial mode”, your personal insurance won’t cover any incidents. However, since you haven’t been matched to a passenger, the insurance the ridesharing company offers won’t cover you in the event of an incident, either.

What Insurance Should You Have During The “Gap” Period?

To make sure that you are fully covered during that “gap” period, the ideal thing to do would be to make sure that you purchase a commercial auto insurance policy. This policy will cover you during all stages of driving, including the “gap” period when your personal insurance and the ridesharing company’s insurance policy are ineffective.

However, not everyone can afford a commercial auto insurance policy; especially Uber and Lyft drivers who are only driving for the ridesharing companies on a part-time basis. So, what can you do?

Look for a company that offers rideshare insurance.

Final Word – What Rideshare Insurance Do I Need in NY?

Ridesharing insurance is a blend of both personal and commercial auto insurance. It offers more comprehensive personal auto coverage but is less expensive than standard commercial auto insurance.

Since ridesharing is relatively new to New York, insurance providers are just starting to offer this type of coverage. The most important thing to remember when driving for Uber or Lyft is to make sure you reach the legal limits with your policy so that you are always legally driving your vehicle. Make sure you shop around to find out which providers do offer ridesharing coverage and will offer you the best protection during the time you are driving your vehicle.