Uber and Lyft Insurance Rules for NYC Drivers

New York City TLC Insurance Requirements for Rideshare Drivers
All Uber and Lyft drivers in NYC must comply with insurance rules set by the NYC Taxi and Limousine Commission (TLC). Minimum coverage includes:

• Liability Insurance: $100,000 per person / $300,000 per accident for bodily injury, plus $25,000 for property damage.
• Uninsured/Underinsured Motorist (UM/UIM) Coverage: $100,000 per person / $300,000 per accident.
• Workers’ Compensation: Mandatory for all TLC-licensed drivers, covering injuries during work.

TLC insurance policies must be issued by an insurer licensed in New York and list the TLC as a certificate holder. Drivers cannot use standard personal auto insurance while operating as rideshare drivers—it voids coverage and violates TLC regulations.

Uber’s Insurance Structure for NYC Drivers
Uber provides tiered commercial insurance, activated during specific ride phases:

1. App Off: No coverage from Uber. Drivers rely on personal insurance.
2. App On (Waiting for Ride Request): Contingent liability ($100,000/$300,000/$25,000), UM/UIM ($100,000/$300,000), and no collision/comprehensive.
3. En Route to Passenger/During Trip: Full $1.5 million third-party liability, $1.5 million UM/UIM, and contingent collision/comprehensive (subject to a $2,500 deductible).

Uber’s policy functions as secondary insurance when drivers have personal policies but becomes primary if their personal policy excludes ridesharing.

Lyft’s Insurance Structure for NYC Drivers
Lyft’s coverage mirrors Uber’s but includes slight differences:

1. App Off: Personal insurance applies.
2. App On (Driver Available): Contingent liability ($50,000/$100,000/$25,000) and UM/UIM ($50,000/$100,000).
3. En Route/During Trip: Full $1.25 million third-party liability, UM/UIM, and contingent physical damage coverage ($2,500 deductible).

Like Uber, Lyft’s insurance supplements personal policies where permissible but fills gaps when personal coverage is absent.

Mandatory TLC-Commercial Insurance for Uber/Lyft Drivers
NYC requires drivers to maintain active TLC-commercial insurance year-round, even during off-duty periods. Key features:

• Commercial Liability Limits: At or above the TLC’s minimum thresholds.
• Physical Damage Coverage (Optional but Recommended): Covers vehicle repairs from collisions, vandalism, or theft.
• Non-Owned Auto Insurance (For Rentals): Required for drivers using rental vehicles.

Top NYC TLC insurers include Progressive Commercial, GEICO Business, Allstate, and newer entrants like Buckner. Premiums average $3,000–$7,000 annually, influenced by driving history, vehicle type, and deductible choices.

Gaps in Uber/Lyft Insurance Drivers Must Address

1. Personal Policy Exclusions: Most personal auto insurers (e.g., State Farm, Farmers) deny claims if drivers use their vehicle for commercial activity outside rideshare coverage phases.
2. High Deductibles: Uber/Lyft impose $2,500 deductibles for collision claims, requiring drivers to pay out-of-pocket for repairs.
3. Gap Period Risks: Between rides or during low-coverage phases, drivers face liability exposure if their personal policy lacks rideshare endorsements.

Drivers can mitigate gaps by adding rideshare endorsements to personal policies (if available) or upgrading TLC coverage.

Driver Requirements and Penalties

• Proof of Insurance: Submit active TLC insurance declarations to Uber/Lyft via their driver portals.
• TLC License and Vehicle Inspection: Drivers must hold a valid TLC license and ensure vehicles pass bi-annual inspections.
• Policy Lapses: A lapse in coverage leads to immediate suspension from Uber/Lyft platforms and fines up to $5,000 from the TLC.

Rideshare platforms monitor policies electronically and deactivate drivers within 24 hours of expiration.

Case Study Scenarios: How Insurance Applies in NYC

1. Case 1: Driver rear-ends another car while en route to a passenger. Uber/Lyft’s $1.5 million liability coverage handles third-party injuries and damage. The driver pays a $2,500 deductible for their vehicle repairs.
2. Case 2: A passenger trips while exiting the vehicle, sustaining injuries. Uber/Lyft’s liability coverage compensates the passenger.
3. Case 3: A driver not actively using the app runs a red light, causing a collision. Their personal insurer denies the claim due to a commercial exclusion, leaving the driver personally liable.

Best Practices for NYC Rideshare Drivers

• Review All Policies: Understand TLC, Uber/Lyft, and personal coverage triggers.
• Renew Promptly: Avoid lapses by renewing TLC insurance 30–45 days before expiration.
• Compare Insurers: Obtain quotes from 3+ TLC-approved providers annually.
• Document Incidents: Take photos, collect witness info, and report accidents to Uber/Lyft immediately.
• Consider Higher Limits: Augment TLC coverage (e.g., $500,000 liability) to reduce out-of-pocket risks.