Today the newest fad in transportation is ride sharing. Some of these programs are available as apps on your phone.
Carpooling and limo/taxi services are distinctly different creatures which are treated very differently in the insurance world. The biggest difference is that taxi/limo service is specifically excluded from coverage on private auto policies., whereas carpooling can be covered (talk to your agent) under your personal auto coverage.
As far as insurance carriers are concerned, if you are receiving money or profiting in anyway to drive people from one location to another you are operating a taxi or limo.
One popular rideshare/taxi site says that they make sure that the drivers who take part in the program are insured and licensed. Unfortunately, many pizza restaurants perform a similiar type of partial "check" on their delivery drivers, risking potentially disasterous results.
Unbeknownst to most of these paid rideshare drivers is that they fall into the same category as delivery drivers and taxis. To put it simply, their insurance company could chose not to cover any claims because personal lines auto insurance specifically excludes these activities. This would be bad news for the driver who could be forced to pay out of pocket for any injury or deaths that occurs in or from their vehicle. Likewise, an injury could also leave a passenger vulnerable with no other avenue for recouping costs outside of suing the driver/owner.
Of course if the driver would like the proper insurance protection he or she would need to purchase commercial auto coverage. As you might imagine, this type of insurance is typically more money and occasional taxi use may not bring in enough bucks to justify. Not having the correct coverage will leave you and your passengers at extreme risk.
The same is true with other private vehicles being used for delivering pizza or newspapers that don't have commercial auto insurance, but one could argue that the potential for financial ruin is higher when passengers enter the equation.
If you are considering using your vehicle to make revenue first consider all the costs involved and know that cutting corners on insurance could leave you and your passengers off the cliff to an unrecoverable financial wreck.
Carpooling and limo/taxi services are distinctly different creatures which are treated very differently in the insurance world. The biggest difference is that taxi/limo service is specifically excluded from coverage on private auto policies., whereas carpooling can be covered (talk to your agent) under your personal auto coverage.
As far as insurance carriers are concerned, if you are receiving money or profiting in anyway to drive people from one location to another you are operating a taxi or limo.
One popular rideshare/taxi site says that they make sure that the drivers who take part in the program are insured and licensed. Unfortunately, many pizza restaurants perform a similiar type of partial "check" on their delivery drivers, risking potentially disasterous results.
Unbeknownst to most of these paid rideshare drivers is that they fall into the same category as delivery drivers and taxis. To put it simply, their insurance company could chose not to cover any claims because personal lines auto insurance specifically excludes these activities. This would be bad news for the driver who could be forced to pay out of pocket for any injury or deaths that occurs in or from their vehicle. Likewise, an injury could also leave a passenger vulnerable with no other avenue for recouping costs outside of suing the driver/owner.
Of course if the driver would like the proper insurance protection he or she would need to purchase commercial auto coverage. As you might imagine, this type of insurance is typically more money and occasional taxi use may not bring in enough bucks to justify. Not having the correct coverage will leave you and your passengers at extreme risk.
The same is true with other private vehicles being used for delivering pizza or newspapers that don't have commercial auto insurance, but one could argue that the potential for financial ruin is higher when passengers enter the equation.
If you are considering using your vehicle to make revenue first consider all the costs involved and know that cutting corners on insurance could leave you and your passengers off the cliff to an unrecoverable financial wreck.
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