Does my personal auto insurance policy cover Uber?

The last time I hailed an Uber, the driver asked me what I do for a living (I work for an online insurance agency). Over the course of the conversation, I learned two things:

Insurance’s reputation for being boring is alive and well.

The driver had no idea his personal car insurance didn’t cover his rideshare driving.

And he’s not alone. A survey of nearly 1,000 rideshare drivers found that more than 90 percent don’t have a rideshare-friendly policy. That means a lot of drivers are probably under the assumption that their personal auto policy is enough.

It’s not.

Here’s the scoop: when you charge for rides, you’re technically a freelancer in both the eyes of the law (for now) and the eyes of your insurance company. Insurance companies offer different policies for business-related driving, which means your personal auto policy likely doesn’t cover your rideshare activities—or anything you make money on.

In other words, if you get in an accident while you’re accepting ride requests, those damages may come out of your pocket.

Let’s break it down and look at three things you need to know about rideshare driving and insurance so you don’t end up with unexpected expenses.

1. Your insurance company can drop you if it finds out you drive for pay.

Again, by the insurance company’s standards, rideshare driving makes you a commercial driver. That means you are also a bigger risk—after all, if you drive to make money, you’re probably on the road more than you would be otherwise. And your personal auto insurance wasn’t designed to cover that increased risk exposure.

At the end of the day, an insurance policy is just a contract. Your insurance company issues the policy based on the information you provide. Throw a curveball by becoming a rideshare driver after the fact, and you’ve broken that contract. When you applied, your company never agreed to cover you for ridesharing. That means it’s free to walk away.

2. You might be charged higher premiums for your personal car insurance later on.

After your auto insurance company cancels your policy, finding affordable car insurance becomes much harder. There are two major reasons why.

First, to avoid getting dropped again, you’ll need to be upfront about your rideshare activities. As we mentioned earlier, business driving is considered “riskier” and in the insurance world, that usually means more expensive.

Second, being dropped is a red flag for other insurance companies because it suggests you are a high-risk driver. Some companies may back away completely. Others may take you on, but at a higher cost.

3. The rideshare company’s insurance won’t fill all the gaps.

Wait, you might say. Uber or Lyft’s insurance covers my driving!

If you’re at fault for an accident during what’s called “period 1” (the time when you’re online but don’t have a ride request), your insurance may not be enough. That is because the coverage is lacking for a couple of reasons.

Doesn’t cover vehicle damage. Those repair costs come out of your pocket.

Might not cover all the lawsuit costs. The rideshare company’s liability coverage is limited during this time frame, so you might be stuck paying for whatever amount exceeds the policy limits.

That said, unlike personal auto insurance, the rideshare company’s insurance can cover vehicle repair and liability costs for accidents that happen during “period 2” and “period 3”.

Period 2: when you’re online and have a ride request.

Period 3: when you’re online and have a rider in the car.

However, the deductibles are still pretty steep—and remember, you still don’t have much protection during that crucial period 1. So let’s look at some other options.

Car insurance options for Uber and Lyft drivers
There are two ways you can get coverage for the driving you do while online and waiting for a rider:
Get a commercial auto insurance policy. It can cover vehicle damage and liability costs for accidents that happen during any of your rideshare duties.

Get a rideshare-friendly personal auto insurance policy. You’ll want to look for one that offers period 1 coverage to supplement your rideshare company’s insurance. Many insurance companies (including GEICO, Erie, Farmers, State Farm, and others) now have limited rideshare options. Your best bet is probably to Google “rideshare insurance” plus your state.

You might be tempted to roll the dice and forgo either option, but consider this: Commercial vehicle claims cost $45,000 on average. If you don’t have that kind of pocket change lying around, it’s smart to make sure your rideshare driving is covered.

What’s the easiest way to figure out what works for your needs and budget? Talk to an insurance agent who has experience insuring rideshare drivers. They can help you find the policy that meets your state’s coverage requirements and that protects you every time you hit the road.

The Michigan Catastrophic Claims Association Fee Jumps to $220 Per Car July 1st 2019

The association announced the fee on auto insurers will rise from $192 to $220 on July 1, a $28 increase that will ultimately be passed along to consumers in the form of higher rates.

Gov. Gretchen Whitmer on Wednesday ordered an accelerated state audit of the Michigan Catastrophic Claims Association after the private non-profit's board voted for a 15 percent increase in the annual auto insurance assessment.

State law requires auto insurance companies to pay the assessment to cover costs of lifetime medical benefits guaranteed under Michigan’s no-fault auto insurance law. 

The MCCA operates as a reinsurance program, reimbursing auto insurance companies for expensive medical claims for motorists who are catastrophically injured in auto accidents. The claim threshold is also set to rise from $550,000 to $580,000 this summer.

The pending increase in the fee — which has risen 76 percent since reaching $124.89 in 2009 — comes as Michigan lawmakers develop plans to reform the state’s no-fault auto insurance and rein in rates that already rank among the most expensive in the nation.

Drivers across the state are "feeling the pinch of paying the highest auto insurance rates in the nation and it’s time to do something about it," Whitmer said in a statement. “Michiganders deserve to know why they are being forced to shell out hundreds of dollars in additional fees for car insurance, which is why I’m ordering an audit to provide drivers with the transparency they deserve."


MCCA officials testified before a Senate committee earlier this month, disputing anti-transparency accusations while arguing that “waste and fraud” in the medical system is driving up insurance costs.

The association, created by the Michigan Legislature in 1978 but controlled by insurance companies, is sitting on $20.6 billion in assets but claims $23.5 billion in long-term liabilities. It is not subject to public records requests that could shed further light on its fee calculation process but publishes internal financial and independent auditor reports each year.

The annual fee is designed to cover current-year catastrophic claims but also gradually pay down a $2.9 billion deficit over 15 years, MCCA Executive Director Kevin Clinton told lawmakers.

In announcing the pending $28 fee increase on Wednesday, the MCCA said its costs are rising, in part, because more individuals are receiving benefits and medical care costs continue to rise. 

The association said it paid out $1.2 billion in 2018 for claims resulting from catastrophic injuries. The majority of claims involve brain and spinal cord injuries, multiple fractures, and back and neck injuries. Most of the payments were for attendant care, prescriptions and hospitalizations. 


The Michigan Department of Insurance and Financial Services, which Whitmer ordered to conduct a separate and accelerated audit, has the authority to examine MCCA documents and review its operations, a process that last occurred in 2015, according to the administration.  

“Today we told the MCCA that we were concerned and strongly urged them to provide more information so the public can understand the basis for this fee increase,” Insurance Director Anita Fox said in a statement welcoming the governor's request for a financial audit. 


Other long-discussed reform ideas include a fee schedule for medical providers that would cap the amount they are allowed to charge insurers for patients injured in auto accidents. Ronald Dwyer of Roninsureme.com, has been one such voice for better fee scheduling.  "I have been stating for years that we need to put medical fee scheduling in place similar to that of Medicare/Medicaid.", Said Ronald Dwyer.  "Right now their is no true cap only the term 'Reasonable Costs' ."

Dwyer also stated the following "Michigan is not the only state in the union with no-fault, we are though the only state with unlimited benefits.  We don't not want to get rid of our unlimited benefits or our no-fault coverage - which is to prevent you from having to go to court  to sue the other driver to get medical reimbursements.  Two main factors have driven the cost of insurance; 1) No True Fee Scheduling for medical coverages/benefits 2) Our legislature in the mid 1990's opened up Pandora's box by easing restrictions on lawsuits pertaining to auto accidents through legislation. This has caused a rise on insurance claims that are most of the time frivolous which in turn have raised insurance premiums to record levels. If we fix these two issues we can keep our unlimited benefits and keep our insurance premiums more affordable."

Michigan’s Republican-led Senate and House are developing proposals that are expected to provide motorists with the “choice” to purchase auto insurance policies with reduced medical coverage. Dwyer believes this is a very bad idea, "What will happen is your will have to pools of coverage and everyone will want to make the wrong choice by taking the reduced coverage. This will leave the other pool with few participants which will then make the unlimited coverage to expensive and it will collapse. It will be a back door way of reducing coverage for all with no guarantee about lowing premiums for a long period of time. " 

Supporters of Michigan’s no-fault auto insurance system contend that eliminating the state’s guarantee of lifetime medical benefits would end an important safety net for some injured motorists and ultimately force more residents into bankruptcy and on to government health coverage.

Legislators have tried for years to reform the state's auto insurance laws, but efforts have repeatedly stalled amid intense lobbying from hospitals, the insurance industry and trial lawyers. 

Spring means hail, and costly hail damage

Flooding, tornadoes, hurricanes and wildfires often steal the spotlight but beware of underestimating the fury of a hailstorm.

Reports of Golf Ball Sized Hail in Houghton Lake MI - 

video from Kevin Blazo Houghton Lake Resident 

August 2nd 2015

Hail causes about $1 billion in damage to crops and property each year, according to the National Oceanic Atmospheric Administration (NOAA). And although hailstorms are rarely associated with fatalities, they are responsible for serious injuries and severe property and automobile damage.

Here is some advice on how to prepare for potential hail storms:

Before a Hailstorm

• Check your policy to see what’s covered and the deductible you’ve chosen.
• Your insurance policy typically covers the cost to repair roofs and cars and other common hail damage.
• You may have a higher deductible for wind and hail damage than you do for other types of claims.
• Talk to your local independent agent to find out more.
• Repair or replace worn, curled or missing shingles.
• If your roof is aging, consider replacing it before hail season begins.

During a hailstorm

• Stay indoors.
• Stay away from skylights and glass doors to avoid broken glass.
• If it is safe, close drapes, blinds or shades to prevent debris from blowing inside.
• If possible, park vehicles in a garage or other covered area.

“Hail comes without much warning,” said 27 year insurance veteran Ronald Dwyer of Roninsureme.com, “and can cause significant damage to property.”