There are some issues, however, which apply specifically to
these service-sharing applications (apps) and their use, creating risks and financial exposures for the service supplier and
customer if the providers are not properly insured to deliver
Anyone who plans to make additional money as an Uber, Lyft
or other ride-sharing service driver should be aware of the
insurance gaps that may exist. Failure to consider them may
expose the driver to unexpected consequences. One of the
ride-sharing platforms states on its opening website page —
“Signing up is easy — Sign up today and you’ll be on the road
in no time. Plus, signing on takes less than 4 minutes. Don’t
wait to start making great money with your car.”
The risk to a new driver is immediate because the usual au-
tomobile liability coverage is specifically excluded when work-
ing with these ride-sharing platforms. For example, a Georgia
automobile policy states the following exclusions under the
Liability Coverage, Medical Expense Coverage and Uninsured
Motorist Coverage sections:
1. This coverage does not apply to bodily injury or property
damage to a person:
a. While occupying your insured car when used to carry
persons or property for a charge. This exclusion does not
apply to shared-expense car pools or the charitable carry-
ing of persons.
Therefore, a potential driver should not plan to work immediately after signing up for the service. Drivers should purchase
commercial automobile liability to cover the losses excluded
by their personal automobile policies. Some insurance companies have attempted to provide commercial policies for these
drivers, but it is fair to say that the market is still trying to understand the real exposures they face. Potential drivers should
research the insurance requirements for their state and discuss
this with an insurance agent to obtain the necessary coverage
at a reasonable price, since there seem to be wide variations
in pricing for this product. Be sure that the cost of this commercial policy does not negate the financial benefit of driving.
Potential drivers should also clearly understand the rules,
exclusions and coverage limitations imposed by these ride-sharing platforms. While each of these companies provides
some guidance or information on insurance requirements,
some of them are somewhat unclear, and there have been cases
in which the ride-sharing companies were reluctant or slow in
assuming liability for their portions of the loss.
The insurance requirements these companies list also vary
by state or even city, and some of the coverage they provide
is contingent on the driver’s coverage. Each state has its own
rules concerning the minimum limits for liability coverage,
and some in the industry definitely believe that minimum limits are rarely sufficient.
This is especially true for those who live in an area with relatively well-to-do customers or in an especially litigious area.
Potential drivers who plan to serve an area encompassing two
or more states should also research the rules and requirements
for each state in which they may drive.
For example, a driver in certain parts of New Hampshire
should consider requirements in New Hampshire, Vermont,
Maine, and Massachusetts. A driver in Washington, D.C.,
should consider requirements in D.C., Virginia, Maryland,
West Virginia, Delaware, and even parts of Pennsylvania. You
get the picture.
Airbnb is perhaps the best-known “home-sharing” app, but
many individuals with second homes, especially in typical
“vacation” areas, may also exchange or lease their properties.
Property providers should consider potential exposures to
confirm they have appropriate coverage for the risks.
Airbnb provides “Host Protection Insurance,” which is primary liability coverage for Airbnb hosts and landlords up to
Drivers joining Uber or Lyft should not
plan to drive for profit immediately after
signing up for the service because they will
have coverage gaps in their policies.