Rideshare driving with companies like Uber and Lyft has become a popular way to earn income, whether as a side hustle or a full-time job. While the flexibility and earning potential are appealing, many drivers overlook one crucial factor: insurance coverage. If you’re a rideshare driver in Maryland, understanding your insurance needs is essential to avoid financial and legal troubles. Having rideshare insurance in Maryland better ensures your safety and financial protection.
Understanding Standard Auto Insurance
Standard personal auto insurance policies in Maryland are not designed to cover commercial activities, including rideshare driving. When you turn on a rideshare app and start accepting passengers, you’re engaging in a commercial activity. This typically voids your personal auto policy during those periods unless you have a specific rideshare endorsement or policy.
Most insurance companies classify rideshare driving as a business activity. Traditional policies often contain exclusions that deny coverage during these times. If you get into an accident while working without the proper coverage, your claim could be denied. This may leave you responsible for damages, medical costs, and even legal fees out of pocket.
What Rideshare Companies Do and Don’t Cover
Uber and Lyft provide some insurance coverage for their drivers, but it’s limited and depends on what “period” you’re in. These companies divide your driving time into three main periods. When the app is off, you are only covered by your personal insurance. When the app is on but you haven’t accepted a ride, Uber and Lyft offer limited liability coverage. After you’ve accepted a ride and until the passenger exits the vehicle, they provide higher coverage, including liability, comprehensive, and collision insurance.
However, there are gaps, particularly in that middle period when you’re waiting for a ride request. The liability limits during this period are much lower than what’s typically needed in an accident. Comprehensive and collision coverage often do not apply unless you’ve opted in or have your own policy that includes rideshare use.
Maryland’s Insurance Requirements
Maryland law requires all drivers to carry minimum auto insurance. However, those minimums are not sufficient for rideshare purposes. The state has specific requirements for rideshare drivers, including higher liability limits. Failing to comply could result in penalties, license suspension, or denied claims after an accident. Relying solely on the coverage provided by Uber or Lyft during the different phases of driving can be risky due to the gaps in coverage, particularly for physical damage to your own vehicle and medical payments.
Why Additional Rideshare Insurance Makes Sense
To bridge these gaps, many insurance companies offer rideshare endorsements or hybrid policies tailored for rideshare drivers. These policies extend your personal coverage into the time when you’re logged into the app but waiting for a ride request. They may also offer more robust collision, comprehensive, and medical coverage that applies even when you’re on the clock.
Having a rideshare-specific policy ensures continuity of coverage. It not only protects your financial well-being but also provides peace of mind knowing you’re not exposed to liability risks while working. Furthermore, Maryland insurance regulators strongly recommend that all rideshare drivers disclose their driving activities to their insurers to avoid unintentional policy violations.
Affordable Rideshare Insurance in Maryland
If you drive for a rideshare company in Maryland, having additional insurance coverage is often necessary to remain protected and legally compliant. At MAIF, we are here to help ensure you are safe during all stages of your work. If you need rideshare insurance, don’t hesitate to reach out. Contact us today to get a free quote and learn more about our insurance policy options.