Rideshare Insurance Requirements in Texas

Texas law requires that rideshare drivers carry a higher level of insurance than people who only drive for personal trips. In addition, most car insurance companies in Texas require special coverage if you drive for a transportation network company (TNC), such as Uber or Lyft. This means 15%–30% higher car insurance rates.

Texas auto insurance requirements for rideshare drivers

To become a rideshare driver for a TNC, including Uber and Lyft, you must have auto insurance that extends beyond the Texas minimums. The exact amount of coverage required depends on the "period" of rideshare when you're driving.

Period 0: While the rideshare app is off and you are using your car for personal purposes, you only need coverage that meets Texas minimums.

Period 1: While you are using a ridesharing app and waiting for someone to request a ride, Texas requires you to have increased levels of liability coverage:

You may need to buy this coverage yourself, or the rideshare company may provide it. Confirm with your TNC what coverage you need. Both Uber and Lyft provide "contingent" driver coverage during this period: You're required to buy coverage on your own, but if your insurance company rejects a claim, your TNC's insurance will protect you.

Periods 2 and 3: While you are on your way to pick up a rider (period 2) or have a passenger in your car (period 3), the required liability is much higher: $1 million for bodily injury and property damage (total) per accident. However, the TNC almost always provides both coverages. Uber and Lyft also provide you with $1 million of uninsured or underinsured motorist coverage per accident. Uber goes a step further, providing contingent collision and comprehensive coverage, which goes into effect while you have passengers.

How much does Texas rideshare insurance cost?

Adding rideshare insurance generally increases standard Texas rates by 15%–-30%, when other coverages are identical. If you're currently carrying the minimum amount of insurance coverage, your rates will increase even more, since you'll be required to increase the coverage limits to be eligible to drive for a TNC.

Compare rates

The exact price difference varies greatly by provider. Progressive only charged a sample rideshare driver 15% more to add rideshare coverage, while Farmers increased the premium by around 30%. If you are considering becoming a driver with a TNC, check with multiple Texas car insurance companies to ensure you're paying the lowest price (even if you already did so the last time you bought car insurance). Every company charges a different amount for rideshare insurance.

Some insurance companies don't provide special coverage, but they do allow you to participate in ridesharing on a normal consumer policy. Other insurance companies don't offer rideshare coverage at all.

Requirements to drive for Uber or Lyft in Texas

In addition to the insurance requirements, you'll need to meet several conditions to become a driver with Uber, Lyft or another TNC in Texas. In general, you'll need to be at least 21, have a valid driver's license, have at least one year of driving experience and pass a driving history and criminal background check. You'll also need a smartphone that can run the Uber or Lyft app.

The car you use also needs to meet certain specs. Both Uber and Lyft have different car requirements based on the level of service. Premium services have more elaborate requirements, but you'll also make more money.

Requirements for Uber and Lyft drivers in Texas

Uber has minimum star ratings for each of its driving levels. If your rating goes below the threshold, you may not be able to pick up riders.

As the level of service increases, Lyft also has more stringent star ratings for its drivers. But the requirements aren't as strict as Uber's. To drive for a particular Lyft service tier, you need at least the following ratings:

Uber vehicle standards

Any vehicle you use for Uber in Texas, regardless of service level, must be under 10 years old (15 in some cities) and in good condition. The car needs four doors and enough factory-installed seats and seat belts to accommodate everyone — at least five, including yours. You must also have Texas-specific insurance and registration, although you don't need to be registered in a city to work as a rideshare driver there.

Uber also has the following service level–specific requirements.

Lyft vehicle requirements

Every Lyft car in Texas must be model year 2002 or newer. It also needs to have four doors and at least five seats and seat belts, including the driver's. You'll also have to meet the legal insurance minimum, and the car must be registered in Texas.

Lyft drivers have different options for the level of service they want to provide. As the service level increases, your earnings will increase, but so will the eligibility requirements.