What kind of auto insurance do you need if you drive for Uber or Lyft?

Finn* started driving for Uber 18 months ago in the Greater Toronto Area to make some extra cash. “I found myself needing $150-$200 extra a month to stay out of the red,” they said. After thinking through different ideas to make more money, Finn decided to drive for Uber. But when they renewed their personal insurance, Finn was asked if they drove for a ridesharing program. They said no. 

“I have absolutely no idea what the repercussions are. Under no circumstances do I want my rates to go up because they already went up due to other circumstances.” 

But Finn’s auto insurance premiums might not necessarily rise if they tell their insurance company they drive for Uber. And they’ll be protecting themselves by doing so, too. We’ll explain why in more detail below.

Uber and Lyft position themselves as an easy way to make extra money with an asset you already own, but don’t use 100% of the time: your car. Getting set up as a rideshare driver takes time but is easy — Uber has a six-step process and Lyft has a process that takes 30 minutes. 

The companies provide coverage when you’re on the clock. Uber provides two million dollars of liability coverage as well as the same amount for uninsured/underinsured motorist coverage. It also has contingent collision and comprehensive coverage for drivers, but only if the car is insured for collision and comprehensive coverage on the driver’s personal auto policy. Finally, in Ontario, Uber has commercial auto insurance for its drivers when they’re on the clock, but haven’t accepted a trip. Lyft offers similar coverage for its drivers. 

Regardless, you’ll need additional insurance on top of what you’re getting from Lyft or Uber.

What coverage do you personally need? 

While Lyft and Uber provide you commercial insurance that offers coverage while you’re providing a ride share service, you’re still required to have your own car insurance when you’re using your vehicle for personal uses. All Canadian drivers must have liability and comprehensive coverage by law. As we’ve discussed before, your premiums depend on a variety of factors including age, your location, the type of car you drive and your driving record. When you add ride-sharing into the mix, you should tell your personal auto insurance provider, because now your personal vehicle is being used for commercial reasons part of the time, says Pete Karageorgos, director, consumer and industry relations (Ontario) at the Insurance Bureau of Canada. That could invalidate your personal insurance even if you’re getting commercial coverage from Lyft or Uber. 

It’s very important that your insurance company knows if you’re using your car for commercial purposes. 

“Part of the reason is because you need to know who is on the hook if an accident happens,” Karageorgos says. Personal insurance won’t cover you if you get into in an accident when you’re working and vice versa. 

Does driving for Lyft or Uber raise your rates? 

Now that we’ve stressed you out about your premiums when all you wanted was to make some extra cash on the side, let’s get to the good news. Just because you drive for a ride-sharing company doesn’t mean your personal premiums will go up. It depends on where you get your insurance.  Karageorgos says that certain private insurers offer coverage for people who drive for Uber or Lyft. 

Aviva Insurance, Intact Insurance and belairdirect all offer insurance for drivers who use their personal vehicles. There are some limitations to these policies, so read everything before you sign up. 

Aviva’s policy allows for 20 hours maximum a week driving for Uber. You also need to have: 

• A G2 drivers licence or higher
• Six years of driving experience. 
• You can only carry up to eight people, including yourself as the driver,
• You can’t use your car for food delivery
• You can’t be registered as a taxi or limousine.  

Intact doesn’t charge an additional cost to drive for Uber. As with Aviva, you can’t work for Uber Eats or any other Uber service. Belairdirect also doesn’t charge extra for driving for a ride share company. However, this coverage is only offered in Ontario. 

So, should you tell your insurance company you’re driving for a ride share company? Yes, for several reasons. The company may offer a policy that offers coverage at no extra cost, but should anything happen, you’ll be covered whether you’re on or off the clock. The extra premiums, if they happen, are still going to be cheaper than what you’d pay out of pocket for an accident. 

*Names have been changed for privacy.