Rideshare Insurance in New Jersey (2024)
If you’re a rideshare driver in the Garden State, it’s important to understand which types of insurance cover you during the different phases of your ride.
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Written byNick Dauk
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6+ years writing about insurance, travel, and personal finances
Contributor to brands like Credible
In addition to insurance, Nick specializes in writing about business, entrepreneurship, personal finance, and travel. He’s been featured in myriad web publications, including Fox Business.
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Reviewed byJacob Gee
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Jacob GeeDigital Insurance Agent
Jacob Gee is a member of Insurify’s agent team, with more than six years of experience in auto, home, and life insurance. Prior to joining Insurify, he was a senior sales representative for Amica Insurance, where he evaluated new business applications, provided data insight for underwriting decisions, and trained new representatives. His career also encompasses work with the Lear Corporation, and Hilton and Omni Hotels.
Updated October 30, 2024
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Table of contents
Driving for a rideshare company is a unique scenario as far as car insurance goes. Services like Uber and Lyft are considered transportation network companies (TNCs), which are different from traditional taxicab services.
New Jersey state law requires all drivers of Uber, Lyft, and other TNCs to maintain a minimum amount of rideshare insurance in addition to all minimum-coverage requirements the state has for private drivers. Here’s what you need to know about rideshare insurance to ensure you’re fully covered.
Quick Facts
New Jersey requires rideshare insurance for anyone driving for Lyft, Uber, or another rideshare service.
Your personal auto insurance isn’t enough to protect you fully when you work as a rideshare driver.
Many well-known insurers offer rideshare insurance.
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Rideshare insurance requirements in New Jersey
Rideshare insurance coverage can be a little confusing for new drivers, and different coverage applies when you’re driving as an independent contractor, as a contracted employee of the rideshare company, or as a private citizen.
Loretta Worters, vice president of media relations for the Insurance Information Institute, suggests that personal insurance policies for rideshare drivers provide the best coverage and financial protection while on the job.
“Often called rideshare insurance, these hybrid policies include coverage for personal auto plus the times drivers are signed into a rideshare app but not covered by Lyft’s or Uber’s insurance.”
To make it clear, the rideshare process is separated into three phases.[1] Since New Jersey requires rideshare insurance, the type of coverage that applies depends on which phase you’re in when an accident or incident occurs.
The three phases of the rideshare process
Phase 1
Phase 1 is when you’re driving for personal use with your rideshare app turned off. During this phase, you’re considered a private driver who isn’t acting as an independent contractor or employee. You’ll need to maintain the minimum amount of car insurance required by New Jersey state law during Phase 1, which is:[2]
Bodily injury
$25,000 per person, $50,000 per accident
Property damage
$25,000 per accident
Personal injury protection (PIP)
$15,000 per person or accident
Uninsured/underinsured motorist protection
Up to $25,000 or more based on liability coverage amount
Essentially, your personal auto insurance policy is the only coverage you have during an accident or incident in Phase 1.
Phase 2
Phase 2 is when you’re actively using the rideshare app but haven’t yet received a ride request. Phase 2 is important to understand, as your insurance company and the rideshare company may have contradictory views on your status.
Although it may feel like you’re still driving as a private citizen, your insurer will likely categorize you as “working” because you’re actively seeking passengers. However, because you aren’t currently on your way to pick up or transporting passengers, your rideshare company will likely categorize you as “not working.”
In New Jersey, state law requires the following insurance minimums while operating a rideshare vehicle during Phase 2:[3]
Primary automobile liability insurance with coverage limits of at least $50,000 for death or bodily injury per person, $100,000 for death or bodily injury per incident, and $25,000 for property damage
Primary personal injury protection benefits
Uninsured and underinsured motorist coverage
This is where additional rideshare coverage through your insurer can cover any gaps. Although rideshare companies may provide commercial insurance during Phase 2, they might limit it to only covering the person or property that you damage.
Both Lyft and Uber provide the following third-party liability insurance for Phase 2:[4] [5]
$50,000 in bodily injury per person
$100,000 in bodily injury per accident
$25,000 in property damage per accident
Phase 3
Similar to Phase 1, Phase 3 has minimal gray area. Phase 3 means you’re actively using the app and are either transporting a passenger or driving to retrieve a prearranged ride.
In New Jersey, you must have the following insurance coverage minimums during Phase 3:[3]
Primary automobile liability insurance with at least $1.5 million for death, bodily injury, and property damage
Primary automobile insurance for medical payments that covers at least $10,000 per person per incident
At least $1.5 million in uninsured and underinsured motorist coverage
In Phase 3, both Uber and Lyft provide:
At least $1 million in third-party auto liability
Underinsured/uninsured motorist and first-party coverages
Contingent comprehensive and collision coverage with a $2,500 deductible, up to the cash value of your car (if you have comprehensive and collision coverage on your personal auto policy)
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Learn More: What is Gap Insurance for Cars?
Uber and Lyft requirements in New Jersey
The freedom and flexibility that Uber and Lyft offer drivers can be attractive, but you can’t simply sign up and start driving if you don’t meet certain requirements. Uber and Lyft require both rideshare vehicles and their drivers to meet specific standards.
All drivers must have current vehicle registration, but rideshare drivers in New Jersey (and their vehicles) must meet some additional requirements.
Uber has the following minimum requirements for vehicles:
Vehicle age of 16 years or fewer (6 years or newer for Uber Black and Uber Black SUV)
Four doors
Good condition without cosmetic damages
No commercial branding
Not all vehicle makes and models are eligible, either. If you’re hoping to earn more money by accepting fares above the basic levels, you’ll need to meet additional requirements, such as needing five seats for an UberX fare or seven seats for an UberXL fare.
Ride options vary from city to city, but you should be aware that other factors like leg room and interior color could also affect your eligibility for categories like Uber Premier or Uber Comfort Electric.
Uber also requires that the driver of the vehicle meet all New Jersey state coverage requirements with a policy in their own name. All vehicles must be registered in New Jersey as well, but they don’t need to be registered under the driver’s name.
Lyft has the following minimum requirements for vehicles:
Vehicle year of 2008 or newer
Four doors
Five to eight seats, including driver’s
Not a taxi, limo, or non-Express Drive rental vehicle
No title that’s rebuilt, non-repairable, salvage, or another equivalent classification
Similar to Uber, Lyft also has specific qualifications for enhanced ride options. For example, Lyft Lux must be a high-end vehicle with leather seats, and Lyft Lux Black XL must be a premium SUV vehicle with a black exterior, leather interior, and space for six passengers.
Rideshare driver requirements
Minimum age of 18
Pass a driver screening
A valid in-state license
One year of driving experience in the U.S., or three years if younger than 25
Minimum age of 25 years
Pass a driver screening
A valid driver’s license, including a temporary or out-of-state license
A smartphone that can download and run the Lyft Driver app
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Types of rideshare insurance coverage
In most cases, traditional car insurance policies don’t provide coverage when you’re driving for a rideshare company like Uber or Lyft — even if you’re using the same vehicle. Many insurers provide this additional coverage option to fill any gaps you’re responsible for while acting as a rideshare driver.
Types of rideshare insurance coverage include:
Liability coverage
This pays for damages that you cause in an at-fault accident. But it doesn’t cover medical expenses.
Uninsured/underinsured motorist coverage
This protects you if you’re in an accident with a driver who has no or limited insurance coverage.[6]
Collision and comprehensive coverage
Collision coverage applies to damages to your car caused by anything your vehicle collides with, such as a telephone pole or in the event of a rollover. Comprehensive coverage applies to damages caused by other incidents like damages from wildlife, weather, theft, vandalism, or fire.[7]
Rideshare insurance FAQs
Whether it’s your full-time career or your weekend side hustle, make sure your policy covers you before, during, and after your rider pickup.
Here’s some additional information you may find helpful if you’re shopping for rideshare insurance in New Jersey.
Do you need rideshare insurance in New Jersey?
Yes. New Jersey state law requires all TNC drivers to have rideshare insurance in addition to their personal car insurance coverage. This includes all drivers of Uber, Lyft, and other companies categorized as transportation network companies. The driver, the TNC, or both can provide the insurance as long as it meets minimum requirements.
Do Uber drivers in New Jersey have to carry commercial auto insurance?
Yes. Drivers in New Jersey must carry rideshare insurance, which is considered a form of commercial auto insurance.
Do you really need rideshare insurance if you have personal auto insurance?
It depends. In some states, rideshare companies provide drivers with a minimum amount of commercial auto insurance for when they’re actively engaged in a rideshare dropoff or delivery. Because your personal auto insurance only covers a select period up to and after the dropoff or delivery, there are gaps that may leave you unprotected in the event of an accident.
What happens if you get into an accident while ridesharing without insurance?
You may face fines, community service, license suspension, insurance surcharges, and other penalties if you’re involved in a ridesharing accident. You’re legally responsible for maintaining the minimum insurance requirements under New Jersey state law.
Does DoorDash count as rideshare for insurance?
Yes. If you want to become a DoorDash driver, you’ll need to maintain the minimum amount of insurance required by New Jersey law. Although DoorDash provides drivers a commercial insurance policy, it only covers bodily/property damage you cause another person/structure while on an active delivery.
Related articles
More cities in New Jersey
Sources
- National Association of Insurance Commissioners. "Commercial Ride-Sharing."
- State of New Jersey Department of Banking & Insurance. "Get Legal with New Jersey's Basic Auto Insurance Policy."
- New Jersey Motor Vehicle Commission. "Transportation Network Companies."
- Lyft. "Insurance coverage while driving with Lyft."
- Uber. "Insurance for rideshare drivers using Uber."
- New Jersey Motor Vehicle Commission. "Insurance Requirements."
- Insurance Information Institute. "What is covered by collision and comprehensive auto insurance?."
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Nick Dauk
Nick Dauk is a freelance writer specializing in business, entrepreneurship, personal finance, and travel. His work has been featured in Fox Business, BBC, The Edge, Business Insider, and Bisnow. Nick is a first-generation college graduate, having majored in Interdisciplinary Studies at the University of Central Florida. His eclectic coursework, combined with previous managerial roles in the retail and broadcast television industries, have helped him develop an interdisciplinary approach to writing.
For nearly a decade, Nick has created content for mom-and-pop businesses and global corporations. As a travel writer, his global adventures have also been featured on Inside Hook, Houston Chronicle, Culture Trip, and Matador. When he's not traveling, Nick can be found in Orlando spending time with his wife and toddler.
7+ years in content creation and management
5+ years in insurance and personal finance content
Ashley is a seasoned personal finance editor who’s produced a variety of digital content, including insurance, credit cards, mortgages, and consumer lending products.
Featured in
Jacob GeeDigital Insurance Agent
Jacob Gee is a member of Insurify’s agent team, with more than six years of experience in auto, home, and life insurance. Prior to joining Insurify, he was a senior sales representative for Amica Insurance, where he evaluated new business applications, provided data insight for underwriting decisions, and trained new representatives. His career also encompasses work with the Lear Corporation, and Hilton and Omni Hotels.
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