If you have a late-model car and an up to date smartphone, you can become an Uber driver. Everyone has heard of this convenient rideshare service by now with most of you reading this having taken at least one Uber ride in the past year.
With a global reach of 71 countries and 429 cities across the globe, Uber is a business model that more people are eager to become a part of as a way of generating a consistent income on their schedule. The Uber app has enabled anyone to turn their personal automobile into a relaxing and affordable form of public transportation.
But for those of you who are already driving for Uber, have you consider the insurance implications of doing business a member of the Uber community? Car insurance is an essential component of operating a motor vehicle on the nation’s roads and highways and when you are driving for Uber, the terms of your personal car insurance policy come under closer scrutiny than if you were simply driving yourself or even some close friends from point A to point B.
Personal Car Insurance
You probably shopped around to save money on car insurance. In doing so, you provided insurers with specific information that pertained to your current situation at that time. When you finally chose an insurance company you were quoted a price for a policy with specific limits and stipulations based upon how often you drove your car, where it was driven to and from most often, where the vehicle was parked and other information that allowed your provider to determine how much of a risk you represented to the company.
Chances are you did not explain that you were using your vehicle as a freelance employee for Uber, yet that is what you are at the moment as far as your insurance company is concerned. Now that you are an Uber driver, almost everything that you claimed to your insurer as to how often the car is being driven and to where has changed. Significantly.
In other words, you are now using your personal car for business purposes and that is not what you expressed in your initial purchase of your present policy. Simply put, your personal insurance will most undoubtedly fail to cover your driving as a rideshare operator. For that, you will need to buy Uber insurance northern Virginia and the premiums on those policies can be considerably more expensive based on your driving record and other assorted factors.
Since you are driving the vehicle far more often than you would be if you were solely driving it for personal use, you have become a greater risk to the insurance company all because the car is on the road more frequently.
The Consequences of Personal Policies as an Uber Driver
If you are driving for Uber on merely a personal auto insurance policy, you could find yourself paying for an accident and all of the related costs out of your own pocket instead of relying on your insurer to cover those expenses.
That’s because you are not complying with the stipulations of your auto policy, as agreed upon by you the insured and the company from whom you have purchased the policy. As a result you could be on the hook for any accident that occurs while you are “on the clock” driving as an Uber driver. Should you get into a crash that is your fault during your hours using your personal vehicle as a freelancer, your insurer can (and likely will) deny the claims, leaving you to pay for any damages that occur.
The insurance companies issue their policies based on calculated risk. You purchased your current policy under a certain level of risk, now that you’re driving the car more often than initially expected, that level of risk has shifted drastically. Therefore, if your insurer finds out that you have been driving as an Uber driver under a personal policy, you can be dropped immediately.
Now you’re left without car insurance. So you can’t drive your vehicle anymore without taking even bigger and more significant risks. Even worse, you may be denied coverage by other insurance companies because you are considered a “high risk”. Should another company decide to take that risk and offer you coverage, you can guarantee that your premiums will be much more expensive. We’re talking as much as 200% or more.
If you’ve been dropped by one company, that is an immediate red flag to other companies who may be more than happy to deny you coverage instead of deal with the potential problems that could come with issuing you a policy, even at a considerably higher premium.