Car sharing and smaller taxi services like Uber and Lyft have grown in popularity over the years. For someone who is intoxicated, these services provide a safe and easy way to get home. If you are thinking about becoming a driver for one of these companies, it is normal to have questions about car insurance.

What's the Problem With Insurance?

Insurance for Lyft and Uber drivers is complicated for three reasons:

• The vehicles are used for both business and personal use
• The companies do not consider drivers to be employees
• The drivers own the vehicles, not the companies

These three problems leave the driver in an awkward place somewhere between personal and business car insurance because most personal car insurance policies do not include business use, and most commercial policies will only cover business use.

What Will the Companies Offer?

The full breakdown offered will depend on the state you are in and the company you drive for. While Uber provides drivers with supplement insurance (only while the Uber application is on), drivers are required to have their own car insurance. Any time the application is turned off, the driver's personal insurance is what covers the vehicle. When the application is on, there is a low level liability insurance that covers the vehicle. Once a trip has been accepted, there is a higher level of insurance which kicks in until the passenger is no longer in the vehicle. There was a time where Uber only offered coverage while a passenger was in the car; however, the policy was updated following a series of lawsuits and car accidents.

Lyft, as well as some of the other ride-sharing companies, use the $1 million per accident liability coverage required in certain states. The purpose of this type of insurance policy is only to handle liability issues when the driver's personal insurance will not cover it. However, this type of policy will never cover the driver's vehicle. The driver's personal insurance is responsible for paying for any and all auto repairs.

What Type of Car Insurance Do You Need?

You will still need insurance coverage of your own. The companies state that you will only need personal coverage, since they offer the coverage when you are on the road. However, this will depend on the state you are in. In some cases, you will still need to have commercial coverage for your business use. Other taxi drivers have to have commercial coverage, and Uber or Lyft are just the same as them.

Will You Need to Tell Personal Coverage About an Accident?

If you have an accident while driving a passenger, you may think you can avoid telling your insurance company. This is certainly not the case. In many instances, you will still need to log the accident with your personal insurance provider. Your company could find out about the accident and then deny your insurance because you have lied.

It's important to have the right level of coverage when driving for Uber, Lyft or any of the other ride-sharing companies. This not only protects your own insurance, but protects your wallet in the event of an accident. Contact a company like Coast Comp Insurance Agency for more information.