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Uber Drivers and Car Insurance – How it works?

Uber Drivers and Car Insurance – How it works?

In recent times Uber has become very popular and you might be thinking of becoming an Uber driver to meet your financial needs. Uber Drivers and Car Insurance is a major concern for the persons doing this business. For Uber drivers getting the car insured is one of the major concerns. Getting into an accident on the road can result in a loss of thousands of dollars. You become abandoned if you have to pay all your repairing cost out of your pocket.

About Uber

Uber is basically a ride service which provides services like Taxi or Yellow Cab services. Passenger can call the Uber ride from the Uber app installed their smartphones and arrange a car for their transportation service.

Most of the times Uber is cheaper than traditional Taxi service. Uber has a huge number of licensed cars. Uber allows local drivers to register their cars into the network and pick the customers and share the revenue with Uber.

In simple words, Uber is a taxi services company who does not own cars and drivers are not directly employed by the Uber. Anyone can drive the Uber taxi and earn money using the Uber app. In many countries, Uber requires Car insurance.

Uber and Personal Auto Insurance Plan

Usually, car insurance companies do not offer coverage in case of “Driving for hire”. If you have purchased the car insurance plan and you start the Uber business. Your insurance company will invalidate the car insurance policy.

If you are going to start Uber taxi business you should contact your insurance providing company to explore if commercial usage of the vehicle is covered or not. If it is not, you should consider availing the car insurance plan so that in case of any loss you do not have to face mental stress caused by huge financial impact.

Uber provides Auto Insurance Coverage

Uber requires all their drivers the Car insurance and offer supplement car insurance plans for their registered drivers. This supplement insurance is offered only while your Uber app is on. When Uber app is logged out then the driver is covered with his own car insurance plan.

When Uber app is on a smaller level of liability insurance is active and when a ride is booked insurance pans shifts to a higher level of liability and will remain active till the end of the ride. Initially Uber offered insurance only when the passenger is in the car but recently Uber changed its policy.

Uber Drivers and Commercial Driving License.

If you are driving for Uber or similar service when you pick a rider then you are driving commercially. Although you are an independent contractor and driver by some states legislation. You might be required to have a commercial driving license. So check with your local motor vehicle authority if such conditions are mandatory to fulfill.

This practice can make you safe from the great financial penalty and mental stress.

If it is required by the state to have a commercial license while you are driving for the Uber or similar services. You can face legislative proceeding against you if you meet with an accident and you do not have a commercial license. Recently, many insurance companies formed many commercial auto insurance plans, especially for Uber drivers.

These special plans are only available in few states but it will spread all across the area where Uber operates. So if you are planning to drive for Uber. You should check with all these conditions at first otherwise you may face the serious consequences.

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