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It's odd that insurance is a fixed cost. The probability of an accident seems like it would increase with more time spent on the road. I assume that either Uber

It's odd that insurance is a fixed cost. The probability of an accident seems like it would increase with more time spent on the road. I assume that either Uber is covering the difference in insurance, or there's a bit of moral hazard at play.

ghaff 9y ago
It depends on the policy. Mine is pretty much a fixed rate. But many policies do have mileage bands.
rm999 9y ago
Both Uber and Lyft cover additional liability insurance as long as the app is open. They also cover comprehensive if a passenger is in the car. https://www.nerdwallet.com/blog/insurance/best-ridesharing-insurance/#2 https://www.nerdwallet.com/blog/insurance/best-ridesharing-i...
astura 9y ago
My insurance company asks me approx how many miles I drive per year and also how far away I live from work (because I list commuting as the purpose of my car). I assume those variables are included in my premium and my (very low) premium would be higher if I drove more or lived far away from from work - my commute is only 4 miles. I also assume the Uber driver would have to tick off "business" as their car's purpose and your insurance may go up just because of that check mark, no matter if the mileage was higher or not.
- SilasX 9y ago
  Right, insurance does care how much you drive, but there are costs to being fine-grained about how you measure it, so they usually lump in everyone below ~30k miles/year and don't bother to count the differences there. I remember entering 10k vs 15k miles per year and the quote was the same for Geico. Of course, you're absolutely right, and insurers have been slow to account for this parameter; the startup MetroMile exists solely because regular insurers overestimated what a difference the mileage makes. (MetroMile charges by how much you actually drive.)
dnautics 9y ago
To a point. If you are conscientious, then more time on the road makes you a better driver, by knowing your car better and being better able to predict what others will do.
IncRnd 9y ago
Exactly. Insurance rates change with greater mileage and also with using a car for business instead of personal use. If there is an accident, an Uber driver will need to pay out of pocket, unless they lie and tell the insurance company the ride wasn't for Uber.

ghaff 9y ago

It depends on the policy. Mine is pretty much a fixed rate. But many policies do have mileage bands.

rm999 9y ago

Both Uber and Lyft cover additional liability insurance as long as the app is open. They also cover comprehensive if a passenger is in the car. https://www.nerdwallet.com/blog/insurance/best-ridesharing-insurance/#2 https://www.nerdwallet.com/blog/insurance/best-ridesharing-i...

astura 9y ago

My insurance company asks me approx how many miles I drive per year and also how far away I live from work (because I list commuting as the purpose of my car). I assume those variables are included in my premium and my (very low) premium would be higher if I drove more or lived far away from from work - my commute is only 4 miles. I also assume the Uber driver would have to tick off "business" as their car's purpose and your insurance may go up just because of that check mark, no matter if the mileage was higher or not.

SilasX 9y ago
Right, insurance does care how much you drive, but there are costs to being fine-grained about how you measure it, so they usually lump in everyone below ~30k miles/year and don't bother to count the differences there. I remember entering 10k vs 15k miles per year and the quote was the same for Geico. Of course, you're absolutely right, and insurers have been slow to account for this parameter; the startup MetroMile exists solely because regular insurers overestimated what a difference the mileage makes. (MetroMile charges by how much you actually drive.)

dnautics 9y ago

To a point. If you are conscientious, then more time on the road makes you a better driver, by knowing your car better and being better able to predict what others will do.

IncRnd 9y ago

Exactly. Insurance rates change with greater mileage and also with using a car for business instead of personal use. If there is an accident, an Uber driver will need to pay out of pocket, unless they lie and tell the insurance company the ride wasn't for Uber.