Rideshare companies such as Uber and Lyft allow us to hire a personal driver on short notice by downloading a computer application (app) on our smartphone, entering our personal information (name, phone number, email address, credit card number) and connecting to a network of vetted drivers.

Laws vary from state to state but most states regulate rideshares and some states require rideshare drivers to have more insurance than other drivers—greater policy limits for personal injuries and property damage, for example.

Because a rideshare driver’s personal insurance policy may not cover an accident that occurs when the driver is providing a rideshare service, some insurance companies offer rideshare drivers a ridesharing endorsement—which is an addition to the rideshare driver’s personal insurance policy and may cover personal injuries and property damage sustained during a rideshare. A ridesharing endorsement usually costs less than a commercial insurance policy.

Companies such as Uber and Lyft may also provide their drivers with some insurance—but it usually has significant restrictions and may require the driver to first make a claim on the driver’s personal insurance policy.

If a rideshare driver involved in an accident does not have a ridesharing endorsement on the driver’s personal policy—and does not have a commercial policy—the driver’s insurance claim will likely be denied if the accident happened during a rideshare. In that case, the insurer may also cancel the driver’s policy for violating the policy term that the vehicle only be used for personal purposes and not for commercial (rideshare) purposes.

If a rideshare driver involved in an accident does have a ridesharing endorsement, the driver’s insurance will be “primary” and the rideshare company’s insurance will be “excess”—meaning it will only be available or “tapped” if the covered personal injuries and property damage exceed the limits of the driver’s insurance policy.

In Colorado, rideshare companies like Uber and Lyft are subject to state regulations that include requirements for driver insurance coverage. Colorado law mandates that rideshare drivers carry a higher level of insurance than typical drivers when they are logged into the rideshare app and available to accept rides, as well as when they are actively transporting a passenger. This includes increased policy limits for personal injuries and property damage. Rideshare drivers in Colorado can obtain a ridesharing endorsement to their personal insurance policies to cover gaps that may exist when they are operating as a rideshare driver. This endorsement is an addition to their personal insurance and can provide coverage during the time they are logged into the rideshare app. If a driver does not have such an endorsement or a commercial policy, their personal insurance claim may be denied if an accident occurs while providing rideshare services, and their policy could be canceled for violating the terms regarding vehicle use. When a rideshare driver does have a ridesharing endorsement, their personal insurance serves as the primary coverage in the event of an accident, with the rideshare company's insurance acting as secondary coverage, which only comes into play if the damages exceed the driver's personal policy limits.