Do You Need Special Insurance for Uber & Lyft Drivers in California?

Introduction

The rise of rideshare platforms like Uber and Lyft has transformed how Californians commute—and how drivers earn income. But many drivers are unaware that their personal auto insurance policy may not fully protect them while driving for a rideshare company. In California, having the right insurance is not just smart—it’s legally required.

This article explains what kind of insurance Uber and Lyft drivers need in California, how rideshare coverage works, and how local agencies like eWay Insurance help drivers find affordable, compliant policies.

Why Regular Auto Insurance Isn’t Enough

Most personal auto insurance policies contain a “business use exclusion,” meaning they won’t cover accidents that happen while driving for profit. If you get into an accident while waiting for a ride request or transporting a passenger, your insurer could deny the claim.

Even though Uber and Lyft offer limited coverage during rideshare activity, it often comes with high deductibles and significant gaps, especially during what’s known as “Period 1”—when you’re logged into the app but haven’t accepted a ride yet.

Without proper coverage, you could be left paying out of pocket for injuries, vehicle damage, or liability claims.

California Rideshare Insurance Requirements (2025 Update)

California law requires that all Transportation Network Company (TNC) drivers carry specific levels of insurance. After the passage of Assembly Bill 2293 and the 2020 Proposition 22 initiative, these requirements were clarified and strengthened.

Here’s what’s legally required:

• Period 1 (app on, no ride accepted):
  
  
• • $50,000 per person bodily injury
    
    
  • $100,000 per accident bodily injury
    
    
  • $30,000 property damage liability
    
    
• Periods 2 and 3 (ride accepted or passenger on board):
  
  
• • $1,000,000 commercial liability coverage provided by the TNC
    
    

These requirements mean personal coverage alone is not sufficient once you activate the app—even if you haven’t picked up a passenger yet.

The 3 Phases of Rideshare Activity and Coverage Needs

Rideshare insurance coverage varies based on what phase of activity you're in:

1. Period 1 – App On, Waiting for Ride
   Your personal auto insurance usually won’t cover you here, and Uber/Lyft’s provided coverage is limited to liability only, with no coverage for damage to your car unless you also have collision on your personal policy.
   
   
2. Period 2 – Ride Accepted, En Route to Pick Up
   Uber and Lyft offer $1 million in liability coverage, plus limited collision and comprehensive (if you carry those on your personal policy).
   
   
3. Period 3 – Passenger in Vehicle
   The same $1 million coverage applies, including limited damage and injury protections.
   
   

Understanding these phases is critical to choosing the right supplemental insurance or endorsement.

What Insurance Do Uber and Lyft Provide?

Both companies offer similar insurance coverage, but only during specific periods of the trip:

• Liability coverage: Up to $1 million for third-party injury or property damage during active rides (Periods 2 & 3)
  
  
• Contingent collision/comprehensive: Applies only if you have this coverage on your personal policy; deductibles are high (typically $2,500)
  
  
• Uninsured/Underinsured Motorist Bodily Injury: May be included but varies by state and carrier
  
  

Uber and Lyft’s coverage does not extend to Period 1 in a meaningful way, and damage to your own vehicle is only covered in limited circumstances.

What is Rideshare Endorsement or Hybrid Coverage?

A rideshare endorsement (also called a hybrid or TNC rider) is an add-on to your personal auto insurance policy that fills in the coverage gaps—particularly during Period 1. It extends your existing personal coverage into the time you’re logged into the app but haven’t yet accepted a ride.

Why it’s useful:

• Covers liability and potentially physical damage during Period 1
  
  
• Avoids claim denials from your personal insurer
  
  
• Less expensive than a full commercial policy
  
  

eWay Insurance works with multiple carriers that offer affordable rideshare endorsements for part-time and full-time drivers.

Do You Need Commercial Auto Insurance?

Not every rideshare driver needs a full commercial auto policy. However, commercial insurance may be required if:

• You drive full-time or exceed a certain number of weekly hours
  
  
• You use your vehicle for other forms of delivery or transport (not just Uber or Lyft)
  
  
• You’re leasing your vehicle from a commercial provider
  
  

eWay Insurance helps you determine whether a rideshare endorsement is sufficient—or whether you’re better protected with a full commercial policy.

Cost of Rideshare Insurance in California

Costs vary depending on your location, driving history, and vehicle type. On average:

• Rideshare endorsement: Adds $20–$50/month to your personal policy
  
  
• Commercial auto policy: Starts at $150–$250/month for basic liability, but can be higher in metro areas like Los Angeles
  
  

Because California’s insurance market is highly competitive, working with a broker like eWay Insurance can save you hundreds per year by comparing quotes from dozens of insurers.

How to Find Affordable Rideshare Coverage in California

Here’s how to get properly insured without overpaying:

• Work with an independent agent: eWay Insurance compares policies from over 80 carriers, ensuring you get the best price and coverage fit.
  
  
• Clarify how often you drive: Occasional drivers may only need an endorsement, while full-timers may require commercial coverage.
  
  
• Look for bundle discounts: If you already insure your home or renters policy with the same company, bundling could save you 10–20%.
  
  

eWay’s bilingual team provides personalized assistance for English and Spanish-speaking drivers throughout Los Angeles and surrounding areas.

Common Mistakes Rideshare Drivers Make

• Assuming Uber/Lyft covers everything: Their coverage has high deductibles and major gaps.
  
  
• Failing to inform their insurer: This can lead to policy cancellation or denied claims.
  
  
• Driving without any rideshare-specific coverage: You’re taking a legal and financial risk every time you log into the app.
  
  

If you're unsure what coverage you have, eWay Insurance can review your current policy and identify any vulnerabilities—for free.

Frequently Asked Questions

1. Is rideshare insurance required in California?
Yes. California law mandates specific liability limits when the rideshare app is active, even if no passenger is on board.

2. Does my personal auto insurance cover Uber or Lyft driving?
No. Most personal policies exclude coverage when the car is used for commercial purposes.

3. What’s the difference between rideshare and commercial insurance?
Rideshare endorsements cover app-based driving part-time. Commercial insurance covers full-time or other types of business use.

4. How much does rideshare insurance cost in California?
Endorsements typically cost $20–$50/month. Full commercial policies can range from $150–$300/month or more.

5. Will I get dropped by my insurer for driving for Uber or Lyft?
Not if you disclose it and have the correct endorsement or policy. Hiding your TNC activity can lead to denied claims or cancellation.

6. Can eWay Insurance help me find rideshare coverage?
Yes. eWay specializes in helping Uber and Lyft drivers compare coverage options from over 80 insurers and get legally compliant for California roads.

Final Thoughts: Protecting Yourself and Your Passengers

Driving for Uber or Lyft in California without proper coverage is risky—not just legally, but financially. Whether you drive part-time or full-time, ensuring you have the right rideshare insurance is essential.

eWay Insurance makes the process simple by matching you with the best rideshare policies for your driving habits, vehicle, and location. Get personalized guidance and a quote today or call (323) 749‑5400.