The Hidden Risk Of Ride Sharing

I think we all use them and love them.  It has radically changed how we think of public transportation.  

Yes the ride-sharing services of UBER(TM)  and Lyft(TM) (and others, I am sure) have radically transformed the way we are transported.

Many people are now using these services to help generate income.  Daily travel commutes from the suburbs to downtown have changed from costs to potential sources of income.  Those time gaps in your day can be turned into opportunities for income generation.  Easy - peasy, right?

What's the catch?

It's important to know that most personal auto insurance policies exclude coverage when you are using your auto for livery services unless you have a specific endorsement on your policy that provides coverage in those circumstances.  To provide for-hire transportation in your vehicle without that endorsement results in the exclusion of certain components of your auto coverage during that time period.  You are essentially driving without insurance.  Driving without liability insurance can result in enormous financial risk in the event of an injury or damage producing accident.

It's important that ALL of your family knows this.

So even if YOU know this, it's important that everyone who is on your policy is also aware of it.  It's possible that one of your kids may be doing some "clandestine" ride sharing to pick up a few extra bucks. While I applaud their initiative, it could get you into trouble.  It's important to ensure that they are aware of this limitation and don't partake in activities which could jeopardize your risk coverage. After all, they are under your policy and potentially using your vehicle.  Any liability that they incur from an accident or other event can result in your financial liability.  Don't ignore this potential pitfall!

Do you want "junior" to earn some money ride sharing?  No problem, just make sure your agent has the appropriate endorsement (and certainly an extra fee) added to your insurance policy to ensure you are covered. Make sure you have the endorsement in writing prior to starting any ride-sharing endeavors.  Better to be safe .... than sorry. 

WhiteCoat Risk Management provides these articles to help improve general risk awareness in all aspects of your life.  It is not responsible for any actions you take or fail to take regarding any aspect of your financial planning or risk management.  This article is provided for information purposes and is not intended to provide individualized advice. You alone are responsible for your financial decisions.  

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