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 Tennessee, rideshare companies like Uber and Lyft are subject to state regulations that include requirements for driver insurance coverage. Tennessee law mandates that rideshare drivers carry a higher level of insurance than typical drivers to account for the increased risks associated with transporting passengers for hire. This includes higher policy limits for personal injuries and property damage. Rideshare drivers in Tennessee may opt for a ridesharing endorsement on their personal insurance policy, which is designed to cover incidents that occur while providing rideshare services and is generally more affordable than commercial insurance policies. However, if a rideshare driver does not have such an endorsement or a commercial policy, and an accident occurs while they are operating as a rideshare driver, their personal insurance claim may be denied, and their policy could be canceled for breach of contract. In cases where a rideshare driver has the appropriate ridesharing endorsement, their personal insurance serves as the primary coverage, while the rideshare company's insurance provides excess coverage, kicking in only if the damages exceed the driver's policy limits.