What is rideshare car insurance?

If you’re thinking of becoming a driver for Uber, DiDi, Ola or another ridesharing service, you may be wondering what type of car insurance you need to have in place to protect you, your vehicle and your passengers.

In addition to Compulsory Third Party Insurance (CTP), which you are legally required to purchase when registering your car, many rideshare companies will ask you to have a minimum of third party property damage insurance, while others might insist you take out full comprehensive cover.

Any injury to your passengers as a result of an accident might be covered under CTP, and a ridesharing company may also offer its own insurance for drivers, but you may also like to consider more comprehensive car insurance policies or specialty rideshare insurance policies to protect you and your passengers.

What is rideshare car insurance?

Rideshare car insurance is a relatively new car insurance product designed specifically with rideshare drivers’ needs in mind. It’s very similar to a comprehensive car insurance policy but includes cover for when the car is being used to transport passengers using rideshare services such as Uber, Didi or Ola. Currently only a handful of insurance providers offer this as a standalone product, but many are adding ‘ridesharing’ coverage as an addition to their car insurance products.

If you are a rideshare driver and want to add this type of cover to your existing comprehensive or third party property policy, you can contact your current provider and find out more about options they may have available. Many car insurance providers will want you to let them know beforehand if you plan to use your car for rideshare services. Not letting them know in advance could void your policy or lead to your claim being refused.

What type of car insurance do I need for ridesharing?

If you plan to become a rideshare driver, it’s best to look into taking out third party property insurance at a minimum. This is in addition to having compulsory CTP or Green Slip insurance.

Some rideshare services may require you to have third party, fire and theft insurance (next level up from third party property) or full comprehensive cover, in which case you will be advised of this when you apply to become a driver.

Whether you have third party property or comprehensive car insurance cover, if it does not specifically cover for rideshare, it is highly recommended to let your insurer know you plan to use the vehicle for ridesharing. Some rideshare services will also require your insurance to include a ‘rideshare condition’.

When you apply to become a driver for a rideshare service, you’ll generally be asked to provide evidence of the car insurance policies you hold for the vehicle. The insurance certificate is often called a Certificate of Currency or a Certificate of Insurance.

Learn more: Types of Car Insurance in Australia

Car insurance through ridesharing services such as Uber

Some rideshare services also offer additional liability cover that exists alongside your own car insurance policies. Uber, for example, offers its drivers a support package that includes personal injury cover and financial assistance, should you be unable to work following an accident.

While some rideshare services offer liability insurance cover to their drivers, it’s important to remember that this does not replace CTP or Green Slip insurance, third party property damage, third party fire and theft or comprehensive car insurance.

Prior to signing up as a rideshare driver, you are likely to be asked to provide evidence of having certain insurance policies in place which are compulsory when you register a car in Australia. You’ll likely have the option of adding additional liability cover if the ridesharing service offers this.

Car insurance requirements to drive with Uber or other ridesharing services

Here are the car insurance requirements and options offered by some ridesharing services in Australia, at the time of writing.

What does car insurance for rideshare drivers cover?

If you are a rideshare driver and have rideshare car insurance or compulsory car insurance that includes rideshare driving, these are likely to be the highest levels of cover available in Australia. Comprehensive car insurance typically provides financial assistance in instances such as damage to other people’s vehicles and/or property, damage or loss of your vehicle caused by fire or theft, and damage caused to your vehicle in a traffic accident, regardless of who is at fault.

Depending on the insurer and policy you choose, there are a range of optional extras you may be able to purchase. This can include a temporary replacement vehicle when your car is being repaired, and no-excess windscreen replacement. One of the benefits of a specific rideshare insurance policy can be the inclusion of a hire car, either as standard or as an optional extra. This would allow you to maintain your rideshare work, which could mean that you won’t miss out on any income while your own vehicle is undergoing repairs or you are awaiting for a replacement.

Explore further: How much does car insurance cost in Australia?

Coverage for rideshare passengers

Rideshare car insurance that you take out as a driver will generally not cover injury to your passengers. However, your CTP insurance may provide financial assistance to cover any medical or liability costs if your passengers are hurt in a car accident where you are at fault. In addition, some ridesharing companies may have their own insurance arrangements in place to cover injuries to passengers.

You may like to speak with your insurer and ridesharing service directly if you have any questions about what is or isn’t included in your current car insurance cover. You can also compare general comprehensive car insurance options using Canstar’s comparison table.

Rideshare car insurance for private use

If you wish to use your rideshare vehicle for private use, rideshare car insurance will often cover you when you are driving the same car for private and personal purposes. Examples include Carpeesh’s Rideshare cover and ShareCover’s RiderCover Comprehensive.

Compare Car Insurance Policies

Rideshare insurance under an existing car insurance policy

Many insurers are expanding their car insurance policies to accommodate drivers who are signed up to ridesharing services, although it may lead to higher premiums in many cases.

Previously, it was more common for car insurers to state that a cover would not be available if you used your car to carry passengers for monetary gain as part of the terms and conditions of their policies. That said, some car insurance providers may still have a clause that says something to this effect in their car insurance policies, including some who may only offer ridesharing cover on comprehensive policies. So, it’s important to let your insurer know if you intend to start driving for a rideshare service to avoid having your insurance voided and allow them to adjust your policy accordingly.

Another factor to take into consideration is your car warranty. Ridesharing services often require the driver’s vehicle to be no more than a certain number of years old, but many car manufacturers have specific clauses to their car warranties for vehicles used for commercial use, including rideshare services. So it may be worth checking how ridesharing will affect your car’s warranty.

Learn more: What is a car warranty and what does it cover?

Can you claim car insurance on your tax return if you are a rideshare driver?

You should generally be able to claim at least some of your car insurance premiums as a deduction in your tax return, alongside all your other business expenses like fuel and the costs to maintain your vehicle. According to the Australian Taxation Office (ATO), expenses for rideshare drivers can sometimes be part business and part private use, and you can only claim a deduction for the business portion of your costs. You will also need to show how you calculated the business and private use components of your expenses.

Keep in mind that there’s a tax-free threshold in Australia, with different tax brackets based on what you earn.

Vist our Tax Hub

You can visit the website of the ridesharing service provider you are thinking of signing up with for further details about driver eligibility requirements.

If you are looking for ways to make money outside of your usual full-time job, there are different side hustles that may appeal, plus ways you could even earn from home. If you’d like to become a rideshare driver and want to buy a car, Canstar has information to help you with comparing car loans, plus tips about how you can borrow for a car loan.

Cover image source: Tero Vesalainen/Shutterstock.com.
Original article written by Katie Rodwell, updated with additional reporting by Alasdair Duncan and Karen Yang.