Texas Rideshare Insurance Requirements

How does Texas rideshare insurance work?

Texas Insurance Code Chapter 1954 divides transportation network company (TNC) driving according to the driver’s status in the app. A TNC driver or the company on the driver’s behalf must maintain primary auto insurance for the statutory periods. The required limits increase when a rider request has been accepted. The personal auto policy may exclude coverage while the driver is logged in or engaged in a prearranged ride, so the driver must understand how the TNC’s policy and any personal rideshare endorsement fit together.

A “prearranged ride” starts when the driver accepts a ride request through the TNC digital network and ends when the last requesting rider gets out of the driver’s personal vehicle. That definition is central. The higher statutory limit applies during the accepted ride period, including the drive to pick up the rider; it does not begin only when a passenger sits in the car. A common study mistake is to collapse the online waiting period and accepted ride period into one limit.

The other major distinction is whether the app is on. With the app off and no TNC driving, the ordinary personal auto policy governs subject to its terms and the state’s financial-responsibility law. Once logged in and available for requests, Chapter 1954’s lower TNC minimum applies. When the driver accepts the trip, the higher limit applies. Record the precise app status and trip timestamps after a crash; the insurer needs those facts to identify the period.

What coverage applies while the driver is logged in but waiting?

Under §1954.052, when the driver is logged onto the TNC network, available to receive requests, and not engaged in a prearranged ride, the automobile policy must provide liability limits of at least $50,000 for bodily injury or death to one person, $100,000 per incident, and $25,000 for property damage. The statute also requires uninsured or underinsured motorist coverage and personal injury protection where those coverages are required under the cited Texas provisions.

These are minimum limits for the online waiting period, not a universal statement about every policy’s total package. Chapter 1954 permits the required insurance to be maintained by the driver, the TNC, or a combination. Any policy maintained under the subchapter must allow the personal vehicle to transport TNC riders for compensation and cover the applicable logged-in or ride period. The actual policy may offer higher limits or additional physical-damage protection.

The driver’s own personal policy may contain an exclusion for app-on use or transportation for compensation. Chapter 1954 expressly permits insurers to exclude losses during logged-on and prearranged ride periods from personal auto coverage, including liability, PIP, UM/UIM, medical payments, comprehensive, and collision coverage. The chapter does not require a personal auto contract to cover TNC driving. Drivers should ask their insurer in writing whether an endorsement is available and what exact period it covers.

A rideshare endorsement is not a substitute for reading the contract. Some endorsements address app-on/no-passenger periods but exclude the time after a trip request is accepted; others may differ. The TNC’s liability policy may not insure damage to the driver’s own vehicle. Review collision and comprehensive coverage, deductibles, exclusions, and whether the TNC has a contingent or primary arrangement for physical damage. Do not promise that “the app covers everything.”

What coverage applies after the driver accepts a request?

Section 1954.001 defines a prearranged ride from acceptance of a passenger’s request until the last requesting passenger exits the vehicle. Section 1954.053 requires at least $1 million in aggregate liability coverage for death, bodily injury, and property damage for each incident during that period. It also requires UM/UIM and PIP where required by the applicable Texas provisions. The statutory trigger is acceptance, not pickup.

That means the route to the pickup location is within the prearranged ride once the request has been accepted. If the driver crashes while approaching the passenger’s address, the higher minimum may apply even though the rider has not yet entered. After pickup, it remains in effect through the trip and until the last rider leaves. If a shared ride has multiple passengers, the endpoint is when the last requesting rider departs.

A 2025 proposal, HB 3520, would have changed the statutory allocation for a driver who accepted a request but had not yet picked up the rider. The bill did not complete the legislative process. As of this draft, current Chapter 1954 still defines the prearranged ride to begin at acceptance and §1954.053 attaches the $1 million limit during that period. Do not teach the failed bill proposal as enacted law. Recheck the current statute before relying on this rule in a future exam year.

Who supplies the required insurance?

The driver or TNC on the driver’s behalf must maintain the statutory primary auto insurance. Chapter 1954 allows the requirement to be met by a driver policy, a TNC policy, or a combination. If the driver’s own policy maintained under the chapter has lapsed or does not provide the required coverage, the TNC must provide coverage beginning with the first dollar of a claim against the driver. A TNC’s coverage is not contingent on the personal auto insurer first denying a claim.

“Primary” means the required TNC-period insurance must respond according to the policy and statute without treating the driver’s personal coverage as an automatic prerequisite. The insurer still investigates fault, damages, exclusions, limits, and other applicable rules. A primary policy is not a guarantee that every loss is covered, and a $1 million liability limit is not a $1 million payment to every injured person. It is a maximum aggregate limit per incident, subject to the policy and liability facts.

The statute also requires the TNC to disclose in writing before a driver accepts a trip request what policy and coverage the company provides and that personal insurance may not cover app-on or prearranged ride use depending on the policy terms. Drivers should save the current TNC insurance card and app disclosures. TNC insurance arrangements can change; the statutory minimum is a floor, not a substitute for reviewing the current certificate or policy summary.

A trip that is canceled or reassigned can create a timing question. If the driver accepted a request, the prearranged ride began; determine when that accepted ride ended under the app record and statutory definition. If no passenger entered the vehicle, do not assume the higher limit never attached. A cancellation before acceptance leaves the driver in the online-and-available stage, assuming the driver remains logged into the network. A subsequent request can begin a new accepted period.

For a shared ride, the prearranged ride does not end when the first passenger exits if another requesting rider remains. The statutory definition runs until the last requesting rider departs. This matters for coverage allocation after the first drop-off. Preserve the trip itinerary and app logs so the insurer can identify whether the crash occurred between stops, during a pickup, or after the final passenger left.

A driver involved in a crash should disclose the TNC status to the investigating officer and insurers. The law requires the driver to carry proof of insurance satisfying the relevant periods and to disclose, on request, whether the driver was logged in or engaged in a prearranged ride. The TNC and insurers have duties to assist with precise login and logout times around the accident and to describe available coverage. Those records can resolve a period dispute.

Personal rideshare endorsements can fill only the gap they actually describe. Read whether the endorsement applies while waiting, en route after acceptance, carrying passengers, or all of those stages. Check physical-damage coverage separately from liability. If the driver does not carry collision on the underlying policy, an endorsement may not create it. A coverage summary or app screen is helpful, but the policy form and endorsement are the contract.

The statutory limits are minimums. A TNC may provide higher liability limits or other coverages, and a driver’s separate commercial policy may also respond. Multiple insurers can investigate the same loss to coordinate responsibility. The limits do not mean every claimant is guaranteed the minimum amount; fault, covered damages, policy conditions, and applicable law still govern. If damages exceed the limit, the existence of a required policy does not erase the possibility of excess liability.

What happens to UM/UIM and PIP?

Chapter 1954 requires uninsured/underinsured motorist coverage and personal injury protection where required by the cited Texas provisions. The phrase “where required” matters because Texas auto law generally requires insurers to offer certain first-party coverages and allows the named insured to reject them in writing under statutory rules. Do not claim that every driver automatically has a particular amount of PIP or UM/UIM coverage during every rideshare period without checking the underlying policy, offer, rejection, and statutory section.

The TNC policy can be the policy providing those coverages for the applicable period, or the coverage may be arranged through the driver or a combination, subject to law. If an injured driver or passenger asks whether UM/UIM applies, identify whose policy is being considered, the at-fault party’s status, the driver’s TNC period, and whether the relevant coverage was offered or rejected. Liability limits and first-party UM/UIM or PIP benefits answer different questions.

How does a personal policy exclusion create a coverage gap?

A standard personal auto contract may exclude certain for-hire transportation or app-based activity. Section 1954.151 authorizes specified personal-policy exclusions while a driver is logged on or engaged in a prearranged ride, and §1954.152 says personal policies are not required to cover those periods. A driver who relies on a personal policy without checking its exclusions may find that it does not respond to a crash during an app-on shift.

The exact gap depends on the policy and TNC arrangement. A liability policy may cover injuries to others but not the driver’s car. A collision policy may be contingent on the driver carrying collision on the personal policy and may impose a large deductible. An endorsement may cover only the waiting period. A personal policy may terminate or be rescinded if the business use was not disclosed, depending on contract and law. Ask the insurer before beginning rideshare work.

A driver should keep records showing login, request acceptance, pickup, drop-off, cancellation, and logout times. After a crash, disclose the rideshare status accurately to police and insurers. Chapter 1954 requires proof of insurance to be carried and, on request, disclosure of whether the driver was logged on or engaged in a prearranged ride. The TNC and insurers must assist with relevant app-time and coverage information. Do not delete app records or describe a paid trip as personal use.

Texas law also requires the TNC to carry proof of its current insurance as part of its operating obligations. A driver should know how to access the proof in the app and keep it available while using the vehicle for rideshare. If a crash occurs, provide the correct document rather than only a personal auto card that may exclude the active period. The proof should identify the carrier and limits, while the app record establishes which statutory period was active.

This is liability coverage for claims arising from a crash, not a general business policy for every activity a driver may perform. Food delivery, package delivery, livery work, taxi use, and peer-to-peer car sharing can be governed by different contracts or statutes. A TNC driver should describe the actual service accurately when applying for insurance and confirm that the product matches the platform and vehicle use.

Worked examples

Crash while waiting for a request

A driver logs into the rideshare app, waits in a parking lot, and is hit by another vehicle before receiving a ride request. The driver was online and available but not engaged in a prearranged ride. The Chapter 1954 waiting-period minimums apply. The driver should preserve app status and verify whether the TNC or driver policy supplies the required coverage.

Crash driving to pick up a passenger

A driver accepts a trip and crashes en route to the pickup. Acceptance begins the statutory prearranged ride, so the $1 million aggregate limit under current §1954.053 applies. The passenger’s absence from the vehicle does not move the crash back into the lower online waiting period under the current statute.

Crash after the last passenger leaves

The passenger exits and the driver stays logged in to wait for another request. The prearranged ride has ended when the last rider leaves. Until the next request is accepted, the driver is back in the online-and-available period, so the lower minimum applies if the driver remains logged in.

Frequently asked questions