Will My Insurance Company Know If I Drive for Uber?

Driving for Uber can be a great way to earn extra income. However many drivers wonder if their personal auto insurance company will find out that they drive for Uber. This is an important question to consider before signing up to drive with Uber.

Why Insurance Companies Care If You Drive for Uber

Personal auto insurance policies are designed for personal use of your vehicle. When you use your car to drive passengers for a ridesharing company like Uber, you are now using it for commercial purposes. This changes the risk profile in the eyes of insurance companies.

There are a few reasons why insurers may have concerns with rideshare driving

• Increased mileage: Driving for Uber means you will likely be putting a lot more miles on your car than the average personal policyholder. More miles driven means more potential for accidents.

• Carrying passengers: There is greater risk associated with carrying multiple passengers vs just driving yourself or your family around.

• Distracted driving: Interacting with the Uber app while driving introduces some distraction from driving, which worries insurers.

• Gaps in coverage: There are potential coverage gaps if you rely solely on your personal policy to drive commercially.

Essentially, insurers want to charge premiums that accurately reflect the risk associated with the use of your vehicle. That’s why many have specific policies or endorsements for rideshare drivers.

How Insurance Companies Detect Rideshare Driving

Insurers have gotten savvy about detecting Uber drivers over the years. Here are some of the ways they uncover rideshare activity:

• Mileage discrepancies: At renewal time, your odometer reading may indicate you drive a lot more than you disclosed when originally quoting your policy. Significant unexplained mileage increases can trigger questions.

• Passenger sightings: Insurers have been known to scout busy areas and take note of drivers picking up rideshare passengers. Some even photograph suspected rideshare vehicles.

• Inside information: Uber may share your driver information with insurance companies, either voluntarily or by legal mandate in some states.

• Accident investigations: Your rideshare app use and activity is likely to be examined closely if you file an insurance claim after an accident.

• Social media: Photos, posts, and other information shared on social media can reveal rideshare driving not disclosed to your insurer.

• Premium payment issues: Difficulty paying your increased premium after disclosure of rideshare usage is a red flag.

The bottom line is that insurers have more ways than ever to discover if their policyholders drive for Uber. Hiding rideshare activity is getting very difficult.

Why Honesty Is the Best Policy

Given how likely it is you’ll get caught if you try to keep Uber driving secret, honesty is the best policy when it comes to dealing with your car insurance company. Here are some good reasons to disclose:

• Avoid denials: Insurers can and will deny claims if you fail to disclose material information like using your vehicle commercially. Then you’ll be stuck paying for damages or medical bills out of pocket.

• Maintain coverage: Personal auto policies can be cancelled if your rideshare driving is uncovered and you failed to inform them. This could leave you without vital insurance coverage.

• Get proper coverage: Your insurer can provide advice on the best rideshare coverage options and make sure there are no gaps.

• Lock in lower rates: Premium increases may be less if you proactively disclose vs if your insurer finds out accidentally.

• Follow the law: Some states actually require you to notify your insurer if you plan to drive for rideshare companies. Fines and penalties apply for failure to disclose.

While your premiums will likely go up if you tell your insurer about Uber driving, the consequences of not being truthful are much worse. Play it safe and be honest.

How Much Will Insurance Rates Increase?

If you inform your insurance company that you plan to drive for Uber, expect your premium to go up. Exactly how much depends on several factors:

• Your insurer: Some companies are more rideshare-friendly than others when it comes to pricing. USAA and Farmers are known for modest increases.

• Your state: States with laws governing rideshare insurance tend to have smaller impacts on rates.

• Your record: A clean driving history helps minimize the size of the increase.

• Your mileage: The more miles you drive for Uber, the bigger the rate hike.

• Your policy: Comprehensive and collision coverage typically sees larger increases than liability-only policies.

While it’s impossible to predict precisely how much your car insurance will go up with Uber driving, expect the increase to be anywhere from 30% to 100% in most cases. The average seems to be around 50%. This is why researching rideshare-friendly insurers is wise.

Uber’s Insurance Policy

Uber provides some insurance coverage for drivers as well, which can help fill coverage gaps and ease insurers’ concerns. Here are some highlights of Uber’s policy per their website:

• Covers third-party liability up to $50k/$100k for injury/accident when waiting for a trip.

• Provides contingent comprehensive and collision coverage during a trip if the driver maintains this coverage personally.

• Maintains uninsured/underinsured motorist coverage in many states.

• Covers injuries to riders and third parties up to $1 million during a trip.

Uber’s insurance kicks in at different times depending on the phase of driving, but it is designed to complement drivers’ personal policies. Reviewing Uber’s coverage options in your state is highly recommended.

Options to Minimize Rate Increases

Here are some proactive steps you can take to help control insurance rate increases from Uber driving:

• Shop around: Get quotes from multiple insurers and compare rates. Some companies are more competitive.

• Adjust mileage: Declare the minimum mileage needed plus expected Uber miles when getting a quote. Don’t overstate.

• Drop extras: Dropping comprehensive and collision brings the biggest savings. Consider going liability-only if your car is old.

• Raise deductibles: Higher deductibles lead to lower premiums. Go as high as you can comfortably afford.

• Enroll in usage-based program: Insurers like Progressive offer programs where you pay based on actual mileage. This can help offset Uber miles.

• Seek discounts: Take advantage of any other discounts like good driver, good student, etc. to help blunt the increase.

With some smart preparation, rate hikes from rideshare driving don’t have to break the bank. Do your homework.

The Takeaway

It’s nearly impossible to keep your insurance provider in the dark if you drive for Uber these days. Attempting to hide it likely ends badly. The wise approach is to be upfront right from the start if you decide to drive for a rideshare service. Anticipate a rate increase, shop around for the best deal, make adjustments to control costs, and take advantage of discounts. While it may cost a bit more, being honest and properly covered gives you peace of mind.