For many people who own a vehicle and have the time, the idea of renting your car to others (car-sharing) or providing rides for money (ride-sharing) seems like a no-brainer. And for people who use these services, it can be a cost-effective way to get around.
With the help of new technology services such as Uber, Lyft and Sidecar (ride-sharing services) and FlightCar, GetAround and RelayRides (car-sharing), this industry is among the fastest-growing in America and around the world.
But as the debate over how to regulate them rages, insurance companies want people to understand what your personal auto insurance policy doesn’t cover. A major issue is liability: When a car is involved in an accident while being used in a car- or ride-sharing service, who pays?
According to the Insurance Information Institute, a standard personal auto policy for a vehicle you own and use personally won’t provide any coverage for any time the vehicle is used for car- or ride-sharing. Your coverage typically stops the moment a car owner logs into a ride-sharing app, and doesn’t resume until the customer/rider has exited and the transaction is closed.
Similarly, if you rent your car to strangers, a typical personal auto policy doesn’t cover it.
READ MORE HERE: Twists and turns in ride- and car-sharing insurance