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What exactly are the insurance implications for ride sharing services like Uber, Lyft, or Sidecar? What about for Airbnb home renters? At the moment, these are not easy questions to answer since the insurance industry is having a difficult time trying to classify these risks, but for now understanding the basics of these implications is something worth looking into – especially if you plan on renting out your house or plan on providing temporary driving services for the highly anticipated Pope visit in September.
In regards to ride-sharing, there are many benefits associated with the concept. For one, you are able to make an extra buck or two whenever you need it and all it entails is driving a couple of passengers around whenever you are free. Your schedule is flexible so you are able to drive when you aren’t working or going to school. If you want it as a full-time job, that is fine too. The flexibility of the ride-sharing program is what drives (no pun intended) most drivers to keep coming back to these ride-sharing companies for more.
However, there are some serious risks associated with the ride-sharing program. Most people who are drivers for these ride-sharing programs only have personal auto insurance – not commercial auto insurance, which leads to the issue of coverage gaps. These drivers’ personal auto policies do not cover accidents if a driver or their passenger get hurt when plugged into the app. There is also a concern if an accident occurs when the driver is logged into the ride-sharing app but not yet matched with a customer. Personal auto policies do not provide coverage for taxi services (i.e. when a car is used to transport people in exchange for money). Therefore, ride-sharing drivers can be responsible for a tremendous amount of out of pocket expenses if an accident does occur while transporting passengers. At the moment, there are some insurers trying to amend this coverage issue but there are no adequate solutions as of yet.
As for renting out your home, there are some benefits, such as flexibility in the visitors you rent to and the extra income you receive from renting your home, but there are risks as well. If a guest causes damage to your property, steals something, or sustains an injury during their rental period, most homeowners’ insurance policies may not cover it.
If you are planning to jump on the bandwagon during the Pope’s visit at the end of September by renting out your home or providing rides to tourists, make sure you know the implications of each. Do your insurance research before deciding on either and consult with your agent.
Read more here: http://www.safeco.com/blog-detail/sharing-economy-/1240027723968