Rideshare Insurance Market Expected to Reach $6.1 Billion by 2032—Allied Market Research

According to a new report published by Allied Market Research, titled, “Rideshare Insurance Market," The rideshare insurance market was valued at $2.2 billion in 2022, and is estimated to reach $6.1 billion by 2032, growing at a CAGR of 11.1% from 2023 to 2032.

Rideshare insurance is a sort of additional coverage that protects the car, the occupants, and any other individuals or property involved in an accident by an Uber or Lyft driver. This ride-hailing insurance endorsement can fill up the gaps between a person's personal motor insurance policy and the business policy of a ridesharing firm (also known as a transportation network company, or TNC).

As more drivers sign up to work for rideshare companies, insurance providers are recognizing the need to offer specialized coverage to protect these drivers and passengers. Many insurance companies now offer rideshare-specific policies that cover drivers when they are working for a rideshare company. In addition to traditional rideshare insurance policies, some insurance companies are now offering hybrid policies that provide coverage for both personal and commercial use of a vehicle. This type of policy can be especially useful for drivers who use their cars for both ridesharing and personal use.

Further, insurance companies are also leveraging new technology to offer innovative products and services to rideshare drivers. For example, some companies are using telematics data to offer usage-based insurance policies that provide coverage based on how much a driver uses their car for ridesharing. Thus, these are factors are notably fostering the growth of rideshare insurance market.

Furthermore, an increase in product launches is expected to promote the rideshare insurance market growth in future. For instance, in December 2021, car insurance startup Ride Protect launched a new innovative rideshare insurance offering. The policy covers rideshare, food delivery, and private use. As a result, consumers no longer need two separate policy types for their vehicle insurance. In addition, the application process uses technology from uBind, which includes a seamless digital experience for rideshare drivers to apply online, enter their registration number, get a quote, and bind within 2 minutes. Moreover, the uBind platform provides a customer portal enabling rideshare and delivery drivers to login and manage their policy, renew their policy online, make adjustments to add other drivers, and access their documents.

Furthermore, in October 2020, Allstate Insurance Company has been selected to provide commercial auto coverage to Lyft in California, Iowa, Indiana, Kansas, Kentucky, Missouri, Ohio, and West Virginia. The policies*, managed by Allstate Business Insurance, provide coverage throughout the cycle of a Lyft trip, from when a driver turns on the Lyft driver app, to pick up and trip completion. Riders are automatically protected by Allstate at no additional cost each time they get in the car with Lyft.

By coverage, the comprehensive coverage segment acquired a major rideshare insurance market size in 2021 and is expected to grow with the fastest CAGR. The growth of this segment is attributed to the fact that this policy generally will protect the car in the event that it is crushed by a collapsing garage, dented by a collision with a deer, spray-painted by a vandal, or destroyed by a tornado. Further, rideshare companies are increasingly providing their own insurance policies that provide comprehensive coverage for their drivers. These policies generally cover damage and losses to the driver’s vehicle caused by events other than collisions.

Region-wise, Asia-Pacific is expected to grow significantly in rideshare insurance market during the forecast period. This is attributed to a combination of regulatory requirements, technological advancements, and increasing competition, as well as the growing adoption of ridesharing services across the region.

The pandemic had a negative impact on rideshare insurance market. The lockdowns and social distancing measures led many people to work from home which avoided unnecessary travel. This has led to a significant reduction in demand for rideshare services, which has in turn reduced the need for rideshare insurance coverage. While demand for traditional rideshare services has declined, the pandemic has led to a significant increase in demand for food delivery services. This has created new opportunities for rideshare drivers who have shifted their focus to delivery work, which required different insurance coverage than traditional ridesharing. Thus, this factor promoted the growth of the rideshare insurance industry during the pandemic situation.     

Key Findings of the Study

• By coverage, the liability insurance segment accounted for the highest rideshare insurance market share, in terms of revenue in 2022.
• On the basis of coverage, the underinsured/uninsured motorist coverage segment is expected to exhibit the fastest growth rate during the forecast period in rideshare insurance market.
• Region wise, North America dominated rideshare insurance market trends in 2022.  

The key players operating in the rideshare insurance market analysis include Allstate Insurance Company, Progressive Casualty Insurance Company, State Farm Mutual Automobile Insurance Company, AXA, Allianz, Bingle Insurance, USAA, NerdWallet, Inc., Farmers, and Erie Indemnity Co. These players have adopted various strategies to increase their market penetration and strengthen their position in the industry.