Driving for a rideshare service can be a great way to make some extra cash. But there are costs associated with being an Uber or Lyft driver — including extra car insurance coverage.

Personal car insurance doesn’t usually cover driving for business use, which is why commercial vehicles have specialized policies. But when you’re a rideshare driver, your personal vehicle isn’t exactly a commercial vehicle — you’re just using it occasionally for business purposes.

This is where rideshare insurance comes in, helping close coverage gaps when you drive for a rideshare company in your spare time. Here’s what to know about rideshare insurance coverage: how it works, what it covers, and when you need it.

What is rideshare coverage?

Many major insurers, including Progressive, Allstate, State Farm, and Farmers, offer rideshare coverage. This type of insurance is typically sold as an add-on to your personal car insurance policy, meaning you don’t need a separate rideshare insurance policy. The add-on, aka endorsement, often includes the following coverage types:

• Comprehensive insurance: Covers damage to your vehicle due to severe weather, theft, fire, or another event outside your control.

• Collision insurance: Covers repairs to your vehicle after a wreck with another car or object, no matter who’s found responsible.

• Uninsured/underinsured motorist insurance: Covers your medical expenses or vehicle repairs if you’re involved in a crash with an at-fault driver without adequate insurance.

Depending on the specifics of your insurer’s rideshare endorsement, you may also be able to get additional coverage, such as roadside assistance or rental car reimbursement.

While you may already have these coverages on your personal auto insurance, without a rideshare endorsement, your policy likely won’t cover you if you’re in an accident while driving for a transportation network company or TNC. This is the primary reason you need rideshare insurance.

Your insurance costs will increase by adding rideshare coverage and vary by insurer. State Farm says its endorsement generally costs between 10% and 20% of your personal policy premiums, while Safeco indicates it’s typically less than $10 per month. Coverage limits and deductibles also vary by insurer. This coverage can help fill an insurance gap, protecting you when your transportation app is on and you’re waiting to accept a ride request.

How does a rideshare company’s insurance cover drivers?

In addition to rideshare add-ons for your personal auto policy, rideshare companies also offer insurance coverage. It works differently than an endorsement you add to your personal policy.

Rideshare services typically offer liability insurance that protects you when en route to a pickup or transporting passengers. You don’t need to pay for this coverage; it’s provided at no cost to rideshare drivers. Liability policies generally have two components: bodily injury and property damage. Bodily injury can pay for healthcare expenses if you’re found at fault in an accident and passengers you’re transporting are injured. Property damage covers you if you back into someone’s garage or mailbox while transporting a passenger.

But coverage provided by a rideshare service is limited, and deductibles can be high. For instance, it won’t necessarily pay for repairs to your vehicle if you hit another vehicle or object, or a tree limb falls on your car. While some rideshare services provide coverage in these cases, it’s usually contingent on what type of coverage you have on your personal policy, and it doesn’t apply unless you’re driving to pick up or are actively transporting passengers.

Even in situations when TNC rideshare insurance covers you, your deductible could be as high as $2,500. Certain insurers that offer rideshare add-ons for personal policies, such as Progressive, may reimburse you for a portion of the deductible if your personal auto policy deductible is lower.

How your rideshare insurance works with a TNC policy

Opting for a rideshare add-on to your personal insurance covers you while your rideshare app is on and you’re waiting for ride requests. And it generally includes comprehensive, collision, and underinsured/uninsured motorist coverage, offering peace of mind that you’re covered if the unexpected occurs.

Note that certain transportation network coverages, such as collision insurance, may only protect you if you have them included on your personal policy. Transportation network coverage options and amounts also vary by state and rideshare company.

Rideshare coverage for food delivery services

Similar auto insurance rules apply if you drive for a food delivery service such as Uber Eats or Doordash.

Most food delivery services offer liability-only insurance for drivers, but again, this coverage is limited. Drivers are typically only covered by the delivery service’s policy if certain conditions are met. For instance, if you’re found responsible for an accident, the service may require that you submit a claim against your personal auto insurance policy first. If your insurer denies that claim, the company’s liability coverage may kick in, provided that your app was activated and you were en route to a delivery or pick up.

Since food delivery services typically only provide liability insurance, you also won’t be covered if your car is damaged in a collision or a severe weather event. If your personal insurance won’t cover repair costs because your car was being used for business purposes, you’ll need to pay for them out-of-pocket.

If you drive for either rideshare or food delivery, you’ll benefit from getting a rideshare add-on to protect yourself financially while making extra cash in your spare time.