Insurance Implications if You Uber, Airbnb, etc.

Yahoo posted an interesting article on June 2nd listing 25 Ways to Make Money Renting Your Home, Car, Kitchen and More to Total Strangers. I am always fascinated to see how people make money. In this digital age, it’s possible for anyone to participate in the sharing economy and make a little extra money too. The one thing that’s missing from this article and other blog posts I’ve seen are the insurance implications for the owner of the home or vehicle, and there are some.

Private car services such as Uber, Lyft, and Sidecar make it possible for a car owner to provide a ride to a person for a fee similar to a taxi cab. The rider doesn’t have to flag down a cab, they simply call one of these services, are picked up, and their account is automatically charged for the fare.

There are two questions anyone driving for one of these services needs to ask, before they start participating in this service.

  • The first question is whether or not their car insurance will cover their vehicle if it’s involved in an accident while driving a client.
  • The second question is whether or not their policy will cover them if the passenger is injured in such an accident.

It’s highly likely your personal car insurance policy will not cover a claim for property damage or passenger injury because the owner / driver is engaged in a commercial operation when they are driving a passenger to a destination. In most cases, the owner / driver will need to have a commercial vehicle policy that provides taxi / limousine coverage. Be sure to confirm that the policy provides taxi or limousine coverage as not all commercial policies do (see

If someone wants to bypass Hertz, National, Budget, etc., they can do so by renting a car through RelayRides, Getaround, and JustShareIt. These services allow people to rent a spare car to anyone for a day or more at rates that are competitive with the national companies. It’s a great way for someone to make some extra cash on a car that would normally be sitting in the driveway.

Most personal car insurance companies won’t cover you for a property damage, personal injury, or liability claim if a renter wrecks your car. You’ll need a commercial insurance policy that will protect you regardless of the claim type, and one accident could expose you to all three types.

If a homeowner wants to make some extra cash renting a room, their home, or a vacation home, they can do so easily through Airbnb, HomeAway, FlipKey, Wimdu, and HouseTrip. The renter(s) get a room, condo, or home that’s nicer than a lot of hotels at a competitive rate.

The biggest issue is whether or not their home insurance policy will protect them for property damage caused by a renter or a liability claim if a renter is hurt. Not all will, regardless of whether the property is a primary or secondary home. In most cases, the best protection will be afforded by a commercial insurance policy that offers the right limits for both property and liability coverage.

Should the insurance issues prohibit you from participating in one of these ventures? Absolutely not, however, confirm with your agent or insurance company what the policy limits are. Find out if you need to purchase commercial insurance for your car or property and then compare that business cost against what you’ll make if you provide rides or rent your home. The cost of not being properly insured could be a lot more than a damaged fender or furniture.

Do you have a question, comment, suggestion, or experience you’d like to share? Please share them with us in the comments section of our blog or on our Google + and Facebook pages. I’d love to hear from you!

Evie Wise
Evie Wise


Evie Wise
Evie Wise

Share this post with your friends

Leave a Reply