Have you ever been sitting in the back seat of an Uber and wondered, ‘What’s it like to be an Uber driver?’ The flexible schedule has been a draw for many to join the company.

But if you’re among the population considering driving for Uber — or already are — it’s important to consider the car insurance implications. After all, you’re no longer just driving for personal use.

From a driver’s perspective, there are three different stages once the Uber app is turned on. It’s important to understand the difference between these three stages, and how insurance coverage works in each situation. Before the Uber app is even turned on, drivers should confirm with their insurance company that their personal auto policy continues to provide coverage despite becoming an Uber driver.

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Stage 1: App is on while waiting for a rider request

During this period, Uber only covers you for your liability to a third party if you’re in an accident and you’re at fault. This means Uber would provide limited coverage for an injury to somebody else or damage to another object, such as their vehicle.

However, in the event you’re injured or your car is damaged during this time (e.g. a collision with another vehicle or object), Uber would not cover these costs. This presents an issue because you may not be covered by your personal auto policy while the app is on even though you aren’t driving to a pickup point or driving with any riders.

So how do you prevent this lapse in coverage for the first stage? Many auto insurance companies now offer a specific ridesharing policy that covers policyholders for both personal and rideshare use at the same time. It’s worth noting, though, this will result in a more expensive premium that varies based on the company.

Stage 2: Uber driver accepted a request, driving to the rider & Stage 3: Driving rider to their destination — how is car insurance affected?

As far as Uber is concerned, these stages are the same for insurance purposes. During these instances, Uber provides extensive third party liability coverage, uninsured and underinsured motorist coverage, as well as collision and comprehensive coverage. Additionally, there’s a $1,000 deductible with the collision and comprehensive coverage.

Some insurance companies’ ridesharing policies offer separate coverage for all three stages, which could lower your deductible in these instances. For example, if you have a $250 or $500 deductible on your own policy that covers stages two and three, you can submit your claim after an accident through your own carrier rather than Uber, which has a $1,000 deductible.

Be aware, Uber’s coverage doesn’t apply in all cities and states. In certain locations, such as New York City, Uber drivers must be licensed and insured to drive commercially — a much pricier policy than personal auto or ridesharing. With states and insurance companies having different rules and regulations for driving for a ridesharing service, it’s important for drivers to call their current auto insurance company to let them know they plan to begin working for Uber.

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