Ride-sharing is becoming a huge concept today, primarily because it offers benefits to both drivers and passengers. If you are considering signing up to be a driver, you may wonder whether you need to purchase special insurance coverage for this. The answer is yes, and here are three things you will want to know before you enroll.
Your Insurance Company Needs to Know
While many insurance companies are okay with covering people who drive for ride-sharing companies, they will want to know that you are doing this. Standard auto insurance policies are not designed for commercial purposes, and ride-sharing services are considered commercial. This is because the drivers are earning money when offering rides, and this makes it a commercial business. Because of this, you must let your insurance company know before you begin.
Your Insurance Policy Might Change
Once you tell the insurance company about your plans, you will find out what you must do to have the right coverage. Most ride-sharing companies have their own insurance policies; however, their policies typically kick in only if the driver's policy is not sufficient for a claim. To make things easier, insurance companies typically want to make sure drivers for ride-sharing services are amply covered.
You may find out that you can keep your current insurance policy, but you may need to increase the coverage amounts. If your insurance company tells you your policy will not be enough, you may need to switch to a different policy. The policy might be called a ride-sharing insurance policy, or the company might recommend switching to a commercial policy.
Why This Matters
As a ride-sharing driver, you will be responsible for the safety of your passengers. If you are at fault for an accident and do not have enough insurance, there is a chance the passenger could sue you, and the results could be devastating. Making money in this way can be a lucrative business; however, it is also important to make sure you are fully protecting yourself before you begin to offer services.
If you are considering becoming a driver for a company like this, you should begin by finding out the requirements from the company. After that, call your auto insurance company to find out if they will cover you if you do this. If not, call around to other insurance companies to learn more about ride-sharing insurance policies and the costs involved.