The carpool industry is growing and continues to expand. This means that, in theory, the demand for travel insurance should also be growing. But, that is not the case, in fact, around 90% of the drivers that are part of Uber or Lyft do not have travel insurance.
Why is this a big problem? Well, the travel companies and the insurance companies see some different phases of the carpool. They are the following:
Period 0: your application is offline and is covered by personal car insurance
Period 1: Your application is online, waiting for requests. Your personal car insurance does not cover it at this time, nor the insurance purchased through the carpool company.
Period 2: You have received an application and if you have insurance through Uber and Lyft, you are now covered.
Period 3: now transports passengers and is covered by the policy of the shared-trip companies.
So, as you can see, there is a gap in which I would not be covered. If an accident occurs during Period 1, you could get stuck paying 100% of the damage. But, that is not the only reason why you should consider getting travel insurance.
Without travel-sharing insurance, you risk having your insurer cancel your personal auto insurance coverage. The reason is that you must specify that you are using your car to earn money because it is not covered by traditional car insurance. After you are removed, your premium will increase significantly as it is now considered high risk.
Another possible obstacle is that not all states offer travel-sharing insurance yet. Prices also vary from one state to another and from one company to another, so be sure to receive approximately three travel-sharing insurance quotes to ensure the best deal for your needs.
However, the good news is that there are many options to ensure that it is adequately covered. You need a policy in some way since you are technically using your vehicle for commercial use, as you are earning money when driving. Then, having said that, if your state does not offer travel insurance or if it is a better option, you can opt for commercial car insurance.
There is also the option to buy Period 1 coverage to close the insurance gap you already have directly from Uber or Lyft. Some insurance companies even offer an agreement where they will not let you drop as long as you reveal that you are a carpool driver. The only drawback is that they will not cover it while your application is online, so experts recommend that you only use this option if you do not move much while waiting for the requests and if you have travel-sharing company insurance. Also, be sure to check with your insurance provider that this is the case to avoid a situation where they leave, at all costs.
Ultimately, it is about some things, one of which is the law of your state. As states have personal auto insurance laws, many are also adding laws regarding travel-sharing insurance and the minimum coverage you need. This should be a main motivating factor. In addition, you should consider how you plan to handle an accident of any scale during Period 1 of a driving session. As mentioned above, you could easily eliminate your bank account without careful consideration.
Therefore, as a driver of shared trips or if you plan to become one, it is crucial to look for travel insurance. Even though your premium may increase slightly, it is affordable, especially in relation to having to pay for all the damages of an accident. In addition, many insurance companies allow you to add an existing auto insurance policy instead of issuing a totally new one that is extremely beneficial for you as a customer. So, in general, it is not only vital, but it is also worth having travel insurance.