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How Should I Insure my Side Hustle?

April 26, 2019 by Nicole Ruth

Passenger giving directions to the driver.

These days, many people have or want a “side hustle” to make extra income.  One of the more popular side hustles is driving—for Lyft, Uber, Grub Hub, etc.  Common sense tells us that the more we are out on the road, the higher the chance is that we will be involved in an accident (especially given how crazy traffic is these days on the Front Range).  Before getting out on the road, it is imperative for drivers engaged in these types of jobs to make sure they have the appropriate automobile insurance to cover them and their vehicle if they are involved in an accident.  Many people think their current insurance, or their employer’s insurance, will cover them if they are involved in an accident.  Unfortunately, this is not always the case, and many drivers are not covered despite these potential layers of coverage.  This is an increasing problem we are seeing with new clients.

Thinking about insurance will make most people’s eyes glaze over.  However, it is extremely important for people who drive for a living to familiarize themselves, and understand, the automobile insurance requirements of their employers. Coverage through employers such as Lyft, Uber, and Grub Hub can change based on whether you have passengers with you, whether you are on your way to make a delivery, or whether you are just cruising around waiting for your next customer (even if you are logged into your employer’s app).  

Once you become familiar with your employer’s coverage, it is extremely important to understand your own coverage and to notify your personal automobile insurer that you will be driving for hire.  Even if you have a high limits policy, or a “commercial” policy, you may not be covered.  Many personal automobile insurance carriers require you to purchase a “ride sharing” endorsement to cover you while you are driving for hire.  Many drivers do not have this coverage, probably because they don’t know they need it.  The insurance companies, however, issue policies based on the information that drivers provide them.  So if you aren’t informing your insurance company that you are driving for hire, they can’t advise you regarding the best coverage to meet your needs.

The bottom line is, you cannot assume you are covered by your employer’s automobile policy just because you are logged into your employer’s app, and you cannot assume that any policy you currently have will cover you if you haven’t told your insurance company that you are engaging in driving for hire.  Your personal automobile insurance company may not provide the kind of coverage you need for these types of jobs, but there are insurance companies out there who do, so you may end up having to switch insurance companies.  This probably seems like a huge hassle, but you are guaranteed to have an even larger hassle on your hands if you are not proactive about these sneaky, pitfall-laden issues.  Protect yourself and your vehicle before you hit the roads, so your side hustle doesn’t end up costing you more than it’s worth!

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