Driving for ride-hailing companies like Uber can be a nice way of earning extra income, particularly since there are few restrictions in relation to the drivers and vehicles that qualify for these companies. It has become the sole source of income for some drivers.

One important thing that you should note is that there are laws that influence how rideshare insurance companies operate. Therefore, you have to keep this in mind when you want to buy insurance cover for your car.

What does my personal insurance policy cover?

The biggest question drivers have when they want to venture into this kind of business is whether they need specialist insurance when they are driving for a ride-haling company.

Basically, companies like Uber require their drivers to have their own insurance on their vehicles. So, this is something you will need to arrange, and you also need to ensure that the policy covers business use.

Essentially, insurance companies divide the time of a ride-sharing driver into three periods or phases. Insurance coverage is based on the period when the accident occurs.

The first phase is when the driver activates the app and then drives around waiting for a match, the second phase is the time when the driver has been matched and is on the way to pick the passenger, and the third phase is when the passenger is in the car, and it stops when the rider gets out of the vehicle.

Can an insurance company offer ride-sharing cover?

You will find a variety of insurance companies that can offer cover to those who drive for companies such as Uber. Of course, you need to make it clear that you are a driver for this type of company, as otherwise, your insurance could be invalidated if you have an accident but have not declared that you drive to earn money.

This means that in the event that you are involved in a car accident and you try to make a claim, your provider will not compensate you. They might even go ahead and cancel your policy because you will have violated the terms and conditions of your policy by not declaring what you use your vehicle for.

Does Uber provide insurance cover for drivers?

In the beginning, Uber drivers faced a huge problem regarding insurance coverage for their drivers. The majority of their drivers did not have a commercial insurance policy in place. Insurance companies consider driving for hire to be high risk which necessitates higher premiums.

Most drivers cannot afford to pay for high commercial policy premiums. Additionally, some insurance companies do not offer policies for ride-hailing drivers.

Over time, ride-sharing companies came to realise that there was an insurance gap that needed to be filled and started offering a basic level of insurance for their drivers. However, the value of this insurance is quite limited.

How do the Uber insurance coverage work?

If you have opened the app and you have not yet received a fare, the Uber policy will offer liability coverage if you are the one at fault during an accident.

Their policy will not cover collision or comprehensive coverage for damage to your car, and if you are injured, it will not extend uninsured or underinsured motorist coverage.

During the second and third phases discussed above; the period between driving to pick up the passenger and during the trip with the passenger on board, Uber insurance will offer comprehensive cover, uninsured or underinsured motorist cover and liability cover.

Comprehensive cover will only be offered if they are available on your personal policy.

Is it possible to get a full commercial policy?

If your insurance company finds out that you are driving for a company like Uber full time, they might ask you to take a commercial policy. This is because they will see it as too high a risk.