Rideshare Insurance NJ

How to Avoid Mistakes When Buying Rideshare Insurance in New Jersey

Even with the most careful drivers, accidents can happen. In 2019, there were over 529 fatal road accidents in New Jersey, causing 558 fatalities throughout the state. Not only do road accidents happen frequently, but they are also costly. So if you drive for popular rideshare companies like Uber or Lyft, you should have insurance for rideshare, and you should also know that the coverage for these accidents will be on the company’s dime.

A common misconception among rideshare drivers is that the personal auto insurance policy or employer-provided commercial policy is enough to cover incidents that may happen when picking up a passenger and driving them to their destination. 

Unfortunately, that is not necessarily the case. Instead of relying on basic coverage when driving for a company like Uber and Lyft, opt for additional rideshare insurance policies from a private insurance company. Read on to determine how rideshare insurance in NJ works and see if the supplemental coverage policy is for you.

A rideshare company driver using a GPS application.

What is Rideshare Insurance?

Rideshare insurance is a policy made for drivers who use personal vehicles for on-demand TNCs (Transportation Network Services) in New Jersey, like Uber and Lyft. This insurance lets you use a combination of liability, injuries, collision, uninsured or underinsured motorists, and roadside assistance coverage. It also fills the gap between your employer-provided auto policy and your personal auto policy while driving for a rideshare company like Uber or Lyft.

Do Lyft & Uber Provide Insurance?

When it comes to New Jersey rideshare insurance, companies like Lyft and Uber provide policies, but the commercial insurance that most ridesharing companies in New Jersey offer their drivers does not provide full coverage. Ridesharing services like Uber or Lyft usually divide coverage periods into the following periods:

Offline

Ridesharing services like Uber and Lyft do not cover damages if you are not online in your rideshare driver application or using the car for non-work purposes. A personal insurance policy covers you during offline driving.

Waiting for Passenger Request (Period 1)

If you are online and logged in for work with your rideshare company, but you do not have a customer yet, you do not qualify for their employer-provided coverage. And since you are working during this period, a personal policy is also invalid. It leaves a gap in your coverage, making you and your car vulnerable when an accident occurs. 

Driving to Pick Up a Customer (Period 2)

Your commercial or employer-provided insurance kicks in once you have accepted a customer request and begin driving to pick them up. However, even if you are eligible for the insurance, most rideshare companies only offer limited liability insurance. For instance, Uber and Lyft provide coverage of $25,000 for property damages, $50,000 per injured person, and $100,000 per general incident. 

Driving Towards the Destination (Period 3)

In this phase, you also qualify for the commercial policy during the whole duration of the ride. However, upon dropping off your passenger, you immediately revert to period one status, where you do not qualify for any coverage. 

Uber, Lyft, and other ridesharing companies only provide commercial auto insurance coverage in NJ for specific periods. These include periods two and three. However, they do not grant full coverage for a rideshare driver during the offline phase and period one. 

When you hire an insurer, the coverage that will protect you during a mix of these periods will depend on their policies. While some New Jersey insurance firms only intend to cover periods 2 and 3, others include periods 1 to 3. But generally, it can protect you wherever there are gaps in the TNC policy’s coverage.

Why Uber & Lyft Drivers Need Ridesharing Insurance

Getting rideshare insurance in NJ is ideal because personal auto insurance policies do not cover passengers’ transport from one destination to another. Meanwhile, employer-provided policies only cover the minimum insurance coverage and set restrictions on insurance coverage. For instance, Lyft and Uber NJ insurance only expand extra coverage during certain periods. If you or your passengers get injured outside of the vehicle, you have to pay for expenses that you cannot afford to lose.

Although the New Jersey government does not require rideshare drivers to purchase extra coverage, getting it ensures everyone’s protection during accidents. A rideshare driver is always on the road, so it is the best choice for them to invest in more extensive coverage than the average commuter.

What Rideshare Insurance in NJ Covers

Different insurers in NJ offer various policies and insurance coverage. It will depend on what you have and what you need. Some firms provide liability protection with or without coverage for collision damage, medical payments for you and your passengers, comprehensive loss, property damage, and underinsured or uninsured motorists.

You may also get a portion of your TNC commercial policy’s deductible covered if you get into an accident. And an insurance company may also let you enjoy benefits such as legal expenses, rental car reimbursement, towing expenses, and roadside assistance. Ensure to read to the fine print that agents from these companies offer you as policies vary.

How Much Does Rideshare Insurance in NJ Cost?

Rideshare insurance is usually cheaper than commercial and personal insurance. However, when it comes down to it, the overall costs will depend on the following:

  • The insurer or provider
  • The specific policies you have chosen
  • The state where you are driving
  • The age of the rideshare driver
  • The driving history and experience
  • Past infractions

How to Buy Rideshare Insurance in NJ?

Some car insurance firms allow you to extend your existing personal insurance policies or add a new TNC policy through official websites and online portals. These companies typically let agents guide you through the process of purchasing this supplemental insurance. When discussing the coverage options, tell your agent you are working as a rideshare driver to tailor their suggestions towards your job’s specific needs.

They will give you a personalized quote based on the area where you drive at, personal information, driving experience or history, and age. Ask for different price quotes from several providers to see which firm can give you the best deal.

What You Need to Know About Lyft and Uber NJ Insurance

As mentioned above, Uber and Lyft offer insurance coverage to rideshare drivers, but they need to be aware that their deductibles are high and are prone to frequent changes. The reason why both ridesharing companies don’t cover drivers who are online and waiting for requests is because the law is struggling to catch up with the ever-evolving demands of the ridesharing market and technology. If you are a ridesharing driver, it’s important to avoid all possible gaps in coverage. 

How to Report an Accident and File a Claim

Whether you are driving for Uber or Lyft in New Jersey, there are a few steps you need to make to report an accident when covered by rideshare insurance in NJ:

Call the Police

Regardless of whether you’re in rideshare mode when an accident happens, your first step should be to call the police. Depending on the rideshare company’s rules, you might also have to show your personal proof of insurance.

File a Claim

The next step is to inform your insurance company. Remember that it’s always better that your personal insurer finds out about the accident from you, even if you can rely on your employer to cover the damage. By not telling your insurer about the accident you risk being dropped. 

Finally, rideshare insurance in NJ is the best way to be fully covered on the job. While rideshare companies like Uber and Lyft change the way people ride and work, additional coverage for drivers is always a good idea if you want to be sure you are covered in case of an accident. 

Did you like this article? If you did, make sure you also learn more about Business Insurance NJ too!