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Car Insurance for Rideshare Drivers
Car Insurance for Rideshare Drivers
Written by
Tina Sendin
Edited by
Laura Crowden
Reviewed by
Adrian Bennett
What is rideshare driver insurance?
Long story short
Standard car insurance isn’t enough for rideshare drivers
Your regular car insurance generally doesn’t cover commercial use, meaning your rideshare gig might leave you exposed during work hours.
CTP insurance is non-negotiable
Compulsory third party insurance is required by law to cover injury-related costs but doesn’t extend to property or vehicle damage.
Liability can make or break your finances
Without the right cover, you could end up paying big bucks for accidents, injuries, or property damage caused while ridesharing.
What is rideshare driver insurance?
With the cost of living going through the roof, many are jumping into the gig economy and turning their cars into cash machines. And why wouldn’t you? Ridesharing offers the freedom to work whenever you like while pulling in additional income.
But here’s where the rubber hits the road: Driving for a living isn’t the same as ducking out to the shops or heading out for the weekday commute – at least to a car insurers’ eyes.
If you’re thinking about joining the rideshare crowd – or you’re already in the game – there are certain things you need to know to stay adequately covered. One of them is that your standard car insurance won’t usually cut it once you start earning behind the wheel.
While some rideshare companies might throw in some insurance, it may not cover your car when you’re using it personally. Plus, if something goes wrong, you could still be stuck covering some of the costs.
So, it’s worth looking into car insurance that offers options for ridesharing services.
What insurance do rideshare drivers really need?
First things first. Rideshare insurance isn’t a standalone car insurance product in Australia. What you’re looking for is a standard car insurance policy that covers ridesharing.
Some (but not all) insurance companies offer coverage for ridesharing as an optional or add-on coverage. So, it’s worth revisiting your car insurance to ensure coverage for both your personal trips and your gig work.
But in general, here are the different levels of cover that can be available for rideshare drivers:
Compulsory third-party (CTP) insurance
First things first – compulsory third-party insurance is non-negotiable in Australia. It’s there to cover injury-related costs for other people if you’re in a prang.
Just keep in mind, this doesn’t cover damage to any vehicles – or anything that isn’t injury-related.
Now, depending on where you live, it might already be bundled up with your rego, or you might need to grab it separately. (You might know compulsory third-party insurance as Green Slip if you’re in NSW, CTP in SA, or Motor Accident Injuries or MAI in Queensland).
Third-party damage insurance
This level of coverage is great if you cause damage to another vehicle or someone’s property. However, it generally doesn’t cover repairs to your vehicle.
Some insurers will provide limited cover for damage to your car caused by a collision with an uninsured driver as long as you didn’t contribute to the incident. They’ll also typically require the name and address of the person and the rego of the vehicle at fault.
Third-party damage insurance is a minimum requirement among some of the major ridesharing companies in Australia, like Uber. Remember, you’ll need to ensure your policy covers ridesharing (this is likely an optional add-on, at extra cost).
Comprehensive insurance
Comprehensive car insurance might cost a bit more, but there’s a reason it’s the go-to choice for most drivers. And honestly, it checks out – it could get you covered for your own car plus anything you might stack into, like someone else’s car or even their fence. Plus, regardless of if you’re at fault or someone else is, this level ensures you’re all covered for both damage and loss.
It’s peace of mind wrapped in one neat insurance package. Again, you’ll need to make sure your policy allows you to add-on ridesharing cover.
Some insurers offer unlimited number of hours that you can drive your rideshare car while maintaining coverage. Great for the hustlers who are constantly on the move.
Comprehensive coverage also meets insurance requirements of the big players in ridesharing – both Uber and DiDi.
I’m a rideshare driver. Why do I need extra cover with my car insurance?
Your regular car insurance is built for private, non-commercial use. But when ridesharing comes into the picture, the rules totally shift – and your cover needs to shift with them.
Running a biz using your vehicle, even part-time, isn’t typically covered under your regular car insurance policy. And if you get into a fender-bender – or worse, if your car is written off – you might end up using your hard-earned money to pay for the damage.
Look, we’re not trying to be total downers here, but just imagine what happens if something goes pear-shaped on the road. What’s your plan if you’re caught up in situations like these without the appropriate level of insurance:
- Passenger-related drama: If a passenger gets hurt while they’re in your car, the responsibility could land squarely on your shoulders.
- Third-party damage: Accidents happen. Scratch up another car or someone’s property, and you’ll be glad you’ve got the right cover.
- Fixing your car: If your car cops damage while you’re on the clock, your everyday policy isn’t going to pick up the tab.
When you’re driving rideshare, there’s one major thing to keep front of mind – liability. If you’re found responsible for damages in a sticky situation, it’ll go one of two ways. Either you’ll be giving yourself a well-deserved pat on the back for sorting out adequate insurance, or you’ll be stuck scratching your head, figuring out how to cover the hefty out-of-pocket costs.
Bit of a no-brainer, really!
What could car insurance cover for ridesharing?
While coverage varies between insurers, here are some general inclusions typically found under a comprehensive level of cover:
- Accidents
- Natural disasters (think floods or storms)
- Collisions or crashes
- Theft or even just an attempt
- Explosions
- Fire
- Vandalism or any nasty, deliberate damage
Some even offer extra perks like a hire vehicle after a theft or an accident where somebody else is at fault (and you’re innocent).
Helpful tip
If you’re looking into rideshare driving, make sure you give your current insurer a heads-up. Some might be cool with you using your car for commercial use but your premiums and policy limits could change as a result of using your car for rideshare.
And if your insurer isn’t on board with ridesharing? Well, that’s your cue to start shopping around for one that is.
Adrian Bennett
General Manager for General Insurance
What impacts the cost of rideshare insurance?
Rideshare car insurance isn’t dirt cheap, but it shouldn’t break the bank either. Just like the standard car insurance, the cost of your premiums depends on several factors, including:
- your car’s mileage
- your vehicle’s make, model, and age
- your age, claims history and driving record
- your location (city dwellers often pay more)
- add-ons, excess amount, and coverage levels
How to save on your premiums
Want to keep your costs down? Here are a few things you can try:
- Opt for a higher excess. You’ll be rewarded with lower premiums in exchange. Just make sure you can afford to stump up for the excess amount should you need to make a claim. If you’re confident in your driving, agreeing to pay a higher excess can lower your premium.
- Install a dashcam or other security devices. Some insurers look at how secure your car is when assessing the premium (and if you have one for evidence in case of disputes).
What kind of insurance do the different rideshare platforms require?
Where do I start if I want to get into the ridesharing business?
If you’re ready to begin your rideshare gig, here’s a handy checklist:
- Notify your current insurer about your plans.
- Compare insurers to get the right coverage and ensure your chosen policy covers you for ridesharing.
- Double-check platform-specific insurance requirements (e.g., Uber, DiDi).
- Keep your vehicle well-maintained to meet inspection standards.
Frequently asked questions
What should I do if I have an accident while ridesharing?
First things first – ensure everyone involved is safe. Contact the appropriate authorities if necessary. Then, reach out to your insurer as soon as possible to start the claims process. Some insurers may also require specific proof, like trip receipts from your rideshare app, photos, and witness information.
Can I claim my rideshare insurance on tax?
If you’re a rideshare driver, there’s a good chance you can claim a portion of your car insurance premium as a tax deduction – it counts as a business expense. But here’s the kicker: you can only claim for the time your cars actually used for ridesharing, not those personal trips to the beach or grocery store. It’s best to have a chat with your accountant or tax agent to get the lowdown on what you can claim for your setup.1For more information, see ATO – Income and deductions for ride-sourcing
What’s the difference between personal car insurance and rideshare insurance?
Personal insurance typically covers private use. Adding rideshare coverage ensures you’re protected when operating your vehicle as part of a business. Without it, risks like liability claims or vehicle repairs during a ride are not covered.
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