Driving for a rideshare company like Uber or Lyft can be a great way to earn extra income or even work full-time on your own schedule. But if you’re using your personal car for this type of work in Maryland, it’s important to understand how your auto insurance works. You may need additional rideshare insurance coverage to protect yourself, your vehicle, and your passengers.
Understanding Rideshare Insurance Basics
When you sign up to drive for a rideshare company, you automatically receive a certain level of commercial insurance coverage through that platform. Uber and Lyft both provide insurance that varies depending on your status in the app. If the app is off, your personal auto policy applies. If you’re waiting for a ride request (also known as “Period 1”), the company provides limited liability coverage, but not collision or comprehensive. Once you’ve accepted a ride and are en-route to pick up or transport a passenger (Periods 2 and 3), the rideshare company’s commercial insurance coverage increases significantly.
However, there are key gaps. During Period 1, for example, neither Uber nor Lyft covers physical damage to your vehicle unless you have comprehensive and collision coverage on your personal policy. Even then, it may not apply without additional rideshare-specific endorsements. These gaps can leave you financially vulnerable if you’re in an accident during certain phases of your shift.
Maryland’s Insurance Requirements
Maryland law requires all drivers to carry a minimum level of personal auto insurance, including liability coverage. However, personal auto policies almost always exclude coverage when the vehicle is being used for commercial purposes, like driving for a rideshare company. This means that even though you’re meeting state requirements for personal driving, your insurer might deny a claim if you’re involved in an accident while working for a rideshare app.
To address this, Maryland passed legislation requiring rideshare companies to maintain certain insurance minimums. However, these are still only in force when you’re actively engaged with the app. Outside those periods, you’re on your own unless you’ve added the proper coverage.
Why Additional Rideshare Insurance Matters
Additional rideshare insurance or a rideshare endorsement bridges the coverage gap between your personal policy and the coverage offered by Uber or Lyft. It typically kicks in during Period 1 and ensures you have continuous coverage no matter your app status. Not all insurance companies in Maryland offer rideshare endorsements, but several major insurers do. These endorsements are usually affordable and could save you thousands of dollars in the event of an accident or claim. They may also cover rental cars and roadside assistance while you’re working, depending on the provider. Without a rideshare endorsement, a claim made during a gray area of app usage could be denied, leaving you with out-of-pocket expenses for repairs, medical bills, and legal fees. Worse, your insurer might cancel your policy for failure to disclose commercial driving activity.
What You Should Do Next
If you’re already driving for a rideshare service or considering it, review your current auto policy and speak with your insurance provider. Ask specifically about how your coverage applies to rideshare driving and whether a rideshare endorsement is available. It’s also worth comparing options from different carriers, as costs and coverage can vary. Being transparent with your insurer is crucial. Attempting to hide your rideshare activity could lead to coverage denials and cancellations that might follow you for years. It’s far better to pay a little more for the right protection than to risk your financial stability.
Rideshare Insurance in Maryland
Rideshare driving in Maryland can be rewarding, but it comes with unique risks that require proper insurance planning. The standard personal auto policy likely won’t be enough. To protect yourself legally and financially, MAIF offers additional rideshare insurance tailored to your needs. Contact us today to learn more about your rideshare insurance options and get a free quote for your business.