You have heard of the manufacturing economy, the services economy and probably the internet economy, but how about the “Gig Economy” or the “Sharing Economy?” The most common businesses falling in the gig economy involve car services such as Uber and Lyft, often referred to as transportation network companies or “TNC’s.” In the sharing economy, homes (Airbnb) are a prominent example, but there is even a toilet sharing service by the name of Airpnp (did you catch the name).
As with much of the rest of society, insurance lags behind these new ventures. Today’s un-endorsed insurance policies are not prepared for the exposures of Airbnb (homeowners insurance), income from drone photography (homeowners policies and business policies) and especially ride sharing (personal auto policy).
Why it matters to you is because many of these services are becoming ubiquitous in our society as they continue to expand to the point where you may be affected without your knowledge. Let’s look just at ride sharing. A group of you decide to go out for the evening and the organizer hires Lyft as the transportation service, or your college-resident child decides, without your knowledge, to supplement his income by being a part time Uber driver.
Under both scenarios the obvious question is, does the driver’s insurance provide any protection while he is acting as a TNC? The answer is that the personal auto policy protecting most of us specifically excludes bodily injury liability and physical damage to the vehicle when being used for “public or livery services.” As an occupant of a TNC vehicle, you are most likely not provided any protection unless the driver has sought out and secured specific coverage. As the parent of the part-time TNC driver, the same rule would apply, but even if the proper coverage is secured, there are significant gaps and there is a very good chance your assets are at risk. Add to the later scenario the fact that insurance is state-regulated; therefore the information about rideshare coverage in your home state may not be true for your college-child’s residing state.
Many states have adopted laws governing this exposure. For example, Virginia and the District of Columbia passed laws governing TNC companies but they are substantially different than the new legislation effective July 1, 2015 in Maryland. Even with legislation, confusion remains as to exactly when coverage applies. Additionally, the limits of coverage are often substantially less than adequate.
Have the discussion with all of the drivers in your home regarding charging a fee for driving – not to be confused with car-pooling or pitching in for gas which are permissible on your policy. As for the exposures you face as the occupant of a TNC vehicle, before you enter the vehicle ask to see proof of insurance from the driver. You might even ask for it to be emailed to on your mobile device as you set up the service. Most TNC’s make electronic copies of the insurance coverage available to their drivers.
Most importantly, pick up the phone, or email and reach out to us. We are happy to review your particular situation with a detailed conversation, through your annual “Goldcare Personal Exposure Checklist,” and the Goldsborough blogs.