Do You Need Extra Auto Insurance to Drive for Uber?

Years ago, people who needed a lift from one place to the next had to either hail a taxi or potentially endure long waits for a car service to arrive. Then Uber hit the scene, and it's been a big game-changer.

With Uber, you might request a ride and get access to a variety of choices in an instant. And depending on the timing of your request, you might end up with a car at your door in just minutes.

But whether you're someone who actually uses Uber or not, you may be interested in driving for the ride-hailing company. Some people drive for Uber as a full-time job, while others turn to Uber as a side hustle.

And in the context of side gigs, there are few options that are as flexible as Uber. You simply shuttle passengers around when you want to, all the while pocketing some extra money you can use to do things like boost your savings account balance, pay off credit card debt, or travel.

If you're interested in driving for Uber, you may be wondering if you'll need to buy extra auto insurance to do so. The good news is that Uber covers its drivers during their shifts. But you'll still need a separate car insurance policy for when you're off the clock.

Drivers are covered

Uber maintains auto insurance for its drivers while they're on duty. So if you decide to drive for Uber, you won't necessarily have to buy additional coverage of your own.

Specifically, Uber offers the following accident coverage for drivers who are active on the app and available or waiting for a ride request:

• $50,000 in bodily injury per person
• $100,000 in bodily injury per accident
• $25,000 in property damage per accident

Meanwhile, if you get into an accident on the way to pick up a passenger or during a paid ride, Uber offers $1 million in third-party liability coverage. It also offers comprehensive and collision coverage, so you can potentially be reimbursed up to the cash value of your car if it's totaled, with a $2,500 deductible.

You still need auto insurance of your own

While you don't necessarily have to buy extra auto insurance to drive for Uber, you still need to maintain personal coverage for when you aren't active on the app or driving for the company. If you're visiting a friend on a weekend and you get into an accident, Uber's coverage won't kick in.

Now the interesting thing is that your auto insurance company is allowed to ask how you use your vehicle, and your usage could help determine what rate you qualify for. Someone who works from home and rarely drives, for example, might score a lower rate than someone who commutes daily.

As such, you'll need to disclose that you're driving for Uber to your auto insurer. And you might see your premium rate rise because of that.

So even though you don't automatically have to buy more insurance coverage if you'll be driving for Uber, you might, unfortunately, have to spend more on auto insurance regardless -- even though Uber has its own coverage for drivers in place. This makes it even more important to shop around and compare rates between various insurers. You might find that one car insurance company offers a much better deal on your premiums, even as an Uber driver, than the company you currently use. Potentially-hiked premiums are an expense you'll need to account for if you're thinking about driving for Uber on either a part-time or a full-time basis.