Rideshare insurance: how it works and what you need to know
- What is ‘rideshare insurance’?
- Why do I need rideshare car insurance?
- What kind of policy do I need to get as a rideshare driver?
- How much does insurance for ridesharing cost?
- What are the insurance requirements for different rideshare companies?
- What should I do if I’m in an accident as a rideshare driver?
- Is my rideshare insurance premium tax deductible?
Are you a rideshare driver? Confused about what kind of car insurance you need while working for companies like Uber, Ola, or DiDi? No worries, you've come to the right place.
We've laid out the details of the insurance cover you need (and can opt-in for) while earning money driving for rideshare services in Australia. We’ll also answer some of the main questions rideshare drivers have about claiming on car insurance and how insurance factors into tax.
What is ‘rideshare insurance’?
Rideshare car insurance isn’t a standalone product, but rather something some insurance providers may include in their cover or as an optional extra you can add onto your policy (usually for an additional cost).
Some rideshare services offer their own form of insurance, but this is usually only for personal liability, which can cover some costs related to you being injured while you’re driving. However, this usually comes with dollar limits or restrictions, and won’t necessarily cover damages to your own car and others.
Why do I need rideshare car insurance?
While you may have some liability cover through the specific rideshare company you work for, this is generally used in tandem with the other types of insurance you’ll either need or may want for additional protection.
So, is insurance required to be a rideshare driver? In short, yes. If you don’t see rideshare cover included in your car insurance product disclosure statement (PDS), it’s likely your policy won’t cover you when earning cash when you drive at all.
This is because as a business, you're technically operating under more risk than a regular driver. (Even home insurance policies can be voided if you sell eggs in your front garden). So if you get into an accident while you’re ferrying Uber or DiDi passengers around, your normal car policy could be voided and can’t be used to cover costs for any damages to your own car or other vehicles.
Your current policy may not cover you if you start driving for a rideshare platform, so be sure to check the fine print carefully before you hit the road.
What kind of policy do I need to get as a rideshare driver?
There are three main levels of car insurance to consider as a rideshare driver. These don’t differ from what any standard car owner would also be considering, but as a rideshare driver you will need to ensure your rideshare work is covered by specific policies.
While the first level of cover is a legal requirement for all drivers in Australia; the next two levels up are technically optional insurances but may be mandated by rideshare services.
- Compulsory third party (CTP) insurance. What CTP insurance (aka your green slip) covers and how you purchase it differs between the states and territories, but it broadly covers the costs associated with people being injured while on the road. It’s a requirement to hold CTP to legally drive in Australia, whether it’s for work or everyday purposes (although there may be different classifications for each purpose). Generally, any personal liability insurance supplied by rideshare platforms will only come into effect if your CTP doesn’t cover all the costs.
- Third party property damage car insurance. This is the lower level of optional car insurance in Australia, and can help cover damages you cause to other people’s vehicles or property while driving for a rideshare service. Just remember it doesn’t insure your own car and may have coverage limits which could mean you’re left out of pocket paying for the remaining damages you caused in a more costly incident.
- Comprehensive car insurance. This is the highest level of cover you can get for your car. While it generally comes with a higher price tag, it covers more and has higher payout limits in certain circumstances, meaning you’re less likely to have to cover post-accident costs on the fly. Importantly, comprehensive car insurance covers your own wheels should they be damaged in a crash or by other events like fires, storms and vandalism. Be sure to check your PDS so you know exactly what is included and any limits or exclusions.
How much does insurance for ridesharing cost?
Like any standard car insurance policy, the price of rideshare car insurance is dependent on a range of factors including your age, gender, driving record, the type of car you drive and its condition, and your insurance history. These factors and more are considered when an insurance company is assessing your risk as a driver and setting premiums to match that risk profile.
If you’re taking out a policy that lists rideshare cover as an optional extra, you can expect to pay more for this inclusion. If it’s included in a policy as standard, it will likely have been factored into the price which could be higher than those without it, as policies with more features usually come with a higher premium. You may also have to provide details on how you use your car, as the number of hours you spend driving for a rideshare service each week or month could also impact your premium.
What are the insurance requirements for different rideshare companies?
Each rideshare company may have different insurance requirements for their drivers, so be sure to check the details before setting out on your first trip. To get you started, here are the basic insurance conditions for a few major rideshare companies in Australia:
Uber car insurance
Uber provides personal liability cover for its drivers at no additional fee, but it only covers costs related to injuries you might incur while driving for this major rideshare player. This can include things like daily payments (to a set limit) for if you’re injured on the job and can’t work, lump-sum payouts to cover certain injuries, and one-off payments if you’re assaulted while on-trip. Other than this cover, Uber requires you to have as a minimum of:
- CTP insurance for your state or territory of residence, and;
- Third party property damage insurance on the car (held under your name or with you listed on the policy)
Ola car insurance
The relevant CTP and a minimum third party property car insurance is also required by Ola depending on your state, but the platform doesn’t offer any form of personal liability insurance on top of this.
DiDi car insurance
There are slightly different requirements for DiDi drivers depending on which state or territory they live in. Across the board, a minimum of CTP and third party car insurance, but in Western Australia and South Australia, the CTP classifications need to be under specific hire car or rideshare car arrangements. While DiDi doesn’t offer insurance through its platform, it does provide discounts on insurance policies through ShareCover.
Shebah car insurance
This female-only rideshare service (which also caters for kids) only specifies that your car must be insured per state requirements and your insurance provider be informed you’re using the car for rideshare purposes.
GoCatch car insurance
With GoCatch you’ll need CTP and third party property cover as a minimum, with rideshare cover clearly indicated in the certificate. Like most other services, you have the option of going with a higher level of cover like third party fire and theft or comprehensive car insurance.
What should I do if I’m in an accident as a rideshare driver?
If you get into an accident as a rideshare drive, phone emergency services if they’re required and it's safe to do so. If police are present, be sure to request a copy of the police statement.
Similar to a standard car accident, you’ll also want to gather information from other drivers and witnesses (like contact details, insurance info, and recorded statements about what they’ve seen) as well as photo evidence of the damages and road conditions at the time of the crash. All of this can be useful when determining who might be at fault (if anyone) and making a claim on your car insurance.
Then you’ll need to contact your insurance company to advise them about the situation and begin the claims process if necessary. You’ll also need to get in touch with the rideshare company you work for and notify them about the incident. Some rideshare companies have support lines for if you’re involved in an accident while driving under their banner.
Read Mozo’s guide on what to do if you’re involved in a car accident if you’re unsure of the specific steps you should take in different circumstances.
Is my rideshare insurance premium tax deductible?
The money you earn as a rideshare driver is part of your assessable income, meaning you’ll need to declare it to the Australian Taxation Office (ATO) when you lodge your tax return each year. This also means the costs related to you earning that income can be tax deductible.
So yes, your rideshare car insurance premiums may be tax deductible. Other running costs which you can claim on tax as a rideshare driver include:
- Fuel or petrol
- Parking fees
- Fees charged by your rideshare platform
- The depreciating value of your car (so long as you’re the registered owner)
- Tissues, bottled water, masks, and sanitising supplies for passenger use
- Road tolls (if your passengers didn’t pay)
However, since you probably also use your car outside the realm of ridesharing, you need to ensure you’re only claiming back the portion of running costs which relate to your ridesharing work. The ATO provides two methods for calculating rideshare tax deductions: cents per-km travelled or keeping a logbook.
The first option includes all running costs and bases your deductible amount on a set rate for each business kilometre, up to a maximum of 5,000km per car each financial year. The logbook method involves keeping a strict diary of expenses and odometer readings for a minimum of 12 consecutive weeks to determine actual or estimated expenses for the year. You can find what works best for you financially and practically, and switch methods in the new financial year if you’re so inclined.
If you’re keen to take out the broadest level of cover for your vehicle while you work as a rideshare driver, compare a few of the comprehensive car insurance policies below.
* Terms, conditions, exclusions, limits and sub-limits may apply to any of the insurance products shown on the Mozo website. These terms, conditions, exclusions, limits and sub-limits could affect the level of benefits and cover available under any of the insurance products shown on the Mozo website. Please refer to the relevant Product Disclosure Statement and the Target Market Determination on the provider's website for further information before making any decisions about an insurance product.
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