Many people are opting to make a bit of extra spending money doing work for services like Uber, but before you turn your vehicle into a part-time "taxi," you may want to think about your auto insurance. There are a range of different facets to consider. The following are a few things that you need to look into.
1. Does your existing policy cover commercial driving?
Before filling your car with fares, contact your current auto insurance provider and ask if your policy only works for personal driving or if it also works for commercial driving. Some personal policies don't cover you if you are driving for hire, and as a result, you may need to get a new policy. However, in other cases, your personal policy may cover driving for payment.
2. What benefits does your policy offer to passengers?
Whether you decide to stick with your existing auto insurance policy or get a new one, you should know how it affects the passengers in your car. In some cases, for example, policies may have a bit of medical coverage for every passenger in the car in the event of an accident. The more coverage you have like this, the safer your riders are from a financial standpoint.
3. Does Uber offer any coverage?
In some cases, companies like Uber may offer a bit of insurance for their drivers. In most cases, the coverage only takes care of liability, but it can vary from state to state depending on the laws. Remember, as an Uber driver, you are a contracted worker, so you don't receive a lot of the benefits of a regular employee, such as a company car or company-sponsored insurance.
4. Do you know how to write off your auto insurance on your tax return?
Once you have figured everything out and made sure you have the correct auto insurance for your needs, you should learn how to write off your auto insurance costs on your income tax returns. As an independent driver, you are considered a small business owner for tax purposes. As a result, you have to report all your income from Uber, but you can also write off your business expenses, and that includes things like auto insurance.
As a general rule of thumb, you can write off the portion of the expense that's related to your business. For example, if you use your car half the time for Uber driving and half the time for pleasure, you can generally write off half the cost of your auto insurance as a business expense.
To learn more about auto insurance and becoming an Uber driver, contact an insurance rep, such as those found at Edwards Insurance Agency, directly.Share