With the rise of transportation network companies (TNCs) such as Uber and Lyft and home-sharing sites such as Airbnb, the question of coverage is an important one to think of. You have a personal auto policy (PAP) to cover your car and most likely homeowner’s insurance to cover your house, but will these policies respond in the event of a loss while being used for ride-sharing or home-sharing? Do you need special ride-sharing home-sharing insurance? We’ve reviewed the basic personal auto policy and homeowner’s policy to go over some information with you.
How does my PAP respond if I’m driving for a ride-sharing service such as Uber or Lyft?
The short answer to this question is- it generally doesn’t. Once you log into whichever ride-sharing service’s app you’re using, typically all coverage under your personal auto policy (except for Personal Injury Protection) stops until you are no longer signed into the app. This means the only thing that’s likely covered in the event of an accident are your own injuries. Your vehicle isn’t covered for physical damage, another person’s property isn’t covered if your negligence caused it to be damaged, and if your passenger or another person is injured because of your negligence, there is most likely no coverage under your policy. So now what?
Now you look to the TNCs and hope. The good news is most TNCs offer some level of coverage for their drivers when they are both signed into the ride-share app and when you have passengers in your car. Because these insurance programs are unique to the TNC, it’s our recommendation that you find out how much protection they offer and compare that to your coverages under your PAP.
At the end of 2017, legislation passed in Florida regarding ride-sharing services but that only requires liability insurance, damage to another person’s property, and PIP to be in place. However, it is expected that personal auto insurers will begin entering the market to offer endorsements to the PAP to add some coverage when driving for Uber or Lyft…..so stay tuned.
What about my homeowner’s insurance and home-sharing?
The typical Homeowners 3 – Special Form policy has some significant limitations on coverage, both for your first party coverage on your property and your potential liability as a homeowner to third parties, if the dwelling is being used for a business. Most policies define business as “a trade, profession or occupation engaged in on a full-time, part-time, or occasional basis; or any other activity engaged in for money or other compensation…” It does have exceptions, such as if you, the insured, receive less than $2,000 in total compensation for the 12 months before the beginning of the next policy period, or if you conduct services for no compensation, such as volunteer activities or home day care services. It also excludes property that does not belong to you and residents of your household that are your relatives or under 21 and in your care. That’s a broad net and we’ll bet it’s likely that those homeowners participating in Airbnb are making more than $2,000 per year. Similar to TNC’s, most companies that are part of home-sharing programs do offer some insurance coverage. Again, we encourage you to research how much protection they offer and how it would apply to a covered loss.
In summary, while these ride-share and home-share programs seem like an easy way to make some extra cash by using your personal vehicle to transport others for a fee, or using your home to rent out to vacationers, make sure you read your policy and are aware of what coverages will, or in most cases, will not apply if a loss were to occur.
If you’d like to review your policy, call our office at 863-683-2228 and speak to your licensed representative.