Auto Coverage for Rideshare or Delivery Drivers

Auto Coverage for Rideshare or Delivery Drivers

In the last few years, many individuals have taken jobs transporting people with Uber or Lyft or as delivery grocery services like Shipt. These services provide opportunities for individuals to earn extra income or take a job that fits into their schedule.

Unfortunately, in Michigan, your personal auto policy will not cover you when you are driving for delivery or rideshare services.

That’s right.

If you work for these delivery or taxi-type services…you need to make sure your personal vehicle is properly insured beyond your personal auto policy.

What sort of coverage do you need?

Of course, all delivery drivers must have the required no fault/liability insurance mandated by Michigan law. But even with such coverage, they may not be covered for a crash caused while working with delivery/rideshare services if there is a “business use exclusion” in your personal auto liability policy. A business-use exclusion is legal in Michigan and basically is exactly like it sounds—coverage is excluded if you’re operating your personal vehicle for a business purpose.

Such ‘business use exclusions’ are legal in Michigan. You don’t want to find out you have no coverage or that coverage has been ‘excluded’ after you file a claim.

Now, typically rideshare companies, like Uber, offer their employees insurance protection once their driver logs into their app, but that coverage might be limited until a ride request has been accepted. Which is to say, that even if you have coverage offered by your employer, that coverage may not be in effect at all times or not adequate to protect you when you’re involved in an accident.

Protect Yourself

So, what do you do to protect yourself? A couple of things to remember: If you are employed providing rideshare or delivery services, you must notify your insurance company, or your existing policy could be canceled. And you need to purchase something called a ‘transportation network endorsement.’

Transportation Network Endorsements

Michigan insurance companies offer a transportation network endorsement. This is additional coverage for those individuals who operate their cars as a ‘rideshare or delivery service.’

In broad terms, the additional coverage provided through such an endorsement enables the driver to have his/her personal auto policy fill in any coverage gaps left by employer-provided insurance. Usually, endorsements also provide the driver with the full liability coverage limits carried on his/her auto policy during the period when the driver is available for hire and provides the driver with all other coverages applicable to his/her auto policy during all periods of ride share or delivery driving.

Talk with an advisor you trust: So, if you’re working with a rideshare or delivery service, make sure you have the appropriate coverage. You may want to contact an insurance agent or financial advisor to ensure you have a) adequate coverage on your existing auto policy as well as an additional rideshare endorsement in case you’re involved in an accident while on the job with Uber, Lyft, Shipt or another such service.