Riding together has its perks, including less traffic, lower gas costs, and fewer cars on the road. Whether you're carpooling with coworkers, taking turns in the school drop-off lane, or hopping into an Uber, shared rides are often a part of everyday life. But if there’s an accident, figuring out who’s responsible can quickly get murky.
In this article, we’ll explore how auto insurance policies address various shared driving scenarios. We’ll take a look at scenarios where a non-owner is driving and explain how to determine fault in multiple-accident situations. We'll also clarify the functions of personal auto insurance and rideshare insurance, highlighting potential coverage gaps that both passengers and drivers should be aware of.
Understanding Liability in Carpool and Shared Ride Accidents
Liability depends on several factors: who was driving, who owns the car, and whether the ride was personal, work-related, or part of a paid service. In casual carpools—like coworkers sharing rides or parents rotating school pickups—the driver’s car insurance is usually what kicks in first. But that doesn’t mean passengers are stuck. If you have a policy with medical payments coverage or personal injury protection (PIP), that may help cover your medical costs.
Things become complicated when the driver is at fault and lacks sufficient coverage. And if someone’s driving people around for money without commercial or rideshare coverage, their insurance might refuse to pay altogether. It’s also worth remembering: liability insurance usually covers the injuries you cause, not the ones you suffer. So, if you’re a regular passenger, it’s smart to review your coverage too.
When the Ride is for Hire: Rideshare Services and Insurance Rules
Rideshare companies like Lyft and Uber have their insurance set up, and it changes depending on what the driver is doing at the time of the accident.
App off: Only the driver’s insurance applies.
App on, no ride accepted: The platform provides limited third-party liability coverage.
Passenger on board or ride accepted: The company usually covers up to $1 million in liability coverage.
That said, gaps still exist, especially if the driver hasn’t added rideshare coverage to their policy. For example, coverage may not include damage to the driver's car, or coverage for uninsured drivers may not be included. If you’re a driver, make sure your insurance covers you during all phases of your rideshare work. And if you’re a passenger, understand that while Uber or Lyft covers you to some degree, your policy might need to step in for certain things.
What Passengers and Drivers Should Know Before Sharing a Ride
Whether you're catching a ride to work or driving your neighbors to an event, it’s essential to know what you’re responsible for—and what kind of insurance you’re working with.
For passengers:
Ask if the driver has insurance and what type it is.
Consider adding coverage for uninsured or underinsured motorists to your policy.
For drivers:
Don’t offer paid rides unless your insurance covers it—standard auto policies often don’t.
Keep your car in good shape and make sure everyone knows the plan (who’s driving, who’s riding, etc.).
Additionally, note that liability laws vary from state to state. In no-fault states, everyone’s insurance pays for their injuries up to a certain amount. In other states, the person responsible for the crash is held accountable. Regardless of where you are, it’s always a good idea to carry proof of insurance, take photos if there’s an accident, and contact your insurer right away.
SelectQuote Can Help You Find the Right Auto Coverage for Shared Driving
If you drive regularly—whether it’s for a carpool, errands, or a rideshare gig—having the right coverage matters. Many people assume their standard policy covers everything, but that’s not always the case. That’s where SelectQuote comes in.
We use proprietary comparison tools to help you compare rates from some of the nation’s most trusted insurance carriers, so you can find coverage that fits your actual driving habits. Whether you're behind the wheel or riding along, we’ll make sure you're protected if something goes wrong.
