Your college student might be considering a part-time job as an Uber, or other independent service driver. There are some things to consider before taking this on.
Uber requires all of their drivers to have car insurance, and provides supplemental insurance coverage, but only while the app is on. Here’s how it works: When the Uber app is off, a driver is covered by their own personal car insurance. When the Uber app is turned on, a low level of liability insurance becomes active. When a trip is accepted, a higher level of coverage kicks in and remains active until the passenger exits the vehicle. Previously Uber had only offered coverage when a passenger was in the car, but the company updated their policy after a series of accidents which resulted in various lawsuits.
If your state requires you to have a commercial driver’s license when driving for Uber, you could be subject to prosecution if you get into an accident and don’t have a commercial license, even if you have a commercial auto insurance policy. Things may soon get less complicated though. Several insurance companies have recently created unique auto policies that are tailored specifically to drivers of Uber, Lyft, etc. These insurance plans are currently only available in select states, but provide an alternative to a traditional commercial auto insurance policy.
Be upfront with your car insurance company about the fact that you’ll be “driving for hire.”. Find out if you will need commercial insurance and if you will need a commercial driver’s license. Come talk to us for more information.
P.S. In California, Oregon and Nevada – you will need commercial auto insurance.