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Ride-sharing, Car-Sharing and your Insurance. from Cohen Miles Insurance Agency

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Ride-sharing, Car-Sharing and your Insurance.

by Jeane on Oct 31, 2016

Hi! I'm Jeane Noriega and I'll be updating the CMI Blog from time to time on varied subjects. A little background on me: I used to work for Cohen Miles from 2005 until 2011, when I had to move to Florida to help my mom and sister out. Now that Mom is healthier and Sis is more stable, I was able to pick up my former position handling the personal lines department. (THANKS LOU!!!) I'm sort of the office guru (along with Matt) on all things trendy and hip, and that includes our topic for today, ride-sharing and peer-to-peer carsharing.

Wait, what are those? You might not know the terms, but you've certainly heard of, or used Uber, Lfyt, RelayRides or Turo. Hop online or on your smartphone to find a ride usually at far cheaper rates than the standard taxi or car rentals. And if you decide to offer your vehicle to use in these services, you can make some extra cash. Who wouldn't want to be able to add money to the Christmas or vacation fund just by using the car you already have? Uber and Lyft fall into the 'ride-sharing' category, where a person is driving you from place to place. 'Peer-to-peer car-sharing' (like RelayRides) is where an individual owner puts their vehicle up for hire to an individual for a fee.

Well, there's a fairly big obstacle in the way of your new side-gig...

The biggest monkey-wrench is that pesky paragraph in the MA Personal Auto Policy called the 'Public Livery Exclusion'. You know, the one that says - If you get paid to take people back and forth in your car (aka, if you HIRE your vehicle out), the policy will not pay in the case of an accident. Of course, it's more specific, but our job is to translate Insurance into English.

Even 'better', the following section was added to the Exclusion wording in 2015:

Exclusion 4, to exclude your auto being used as, or available for use as, public or livery conveyance, including a vehicle for hire through a ride-sharing program, car-sharing program, and transportation network service which operate under an agreement and for compensation. This does not apply to the use of your auto in a share-the-expense car pool in an expense reimbursement program either as a volunteer or at work. This does not apply to the use of your auto in providing volunteer transportation services at the direction of a charitable group.

Translation: You cannot use your vehicle to earn money for giving rides. You cannot rent your car to someone else to earn money. Period. Not with a livery company, not on your own, not with a ride-sharing company like Uber or Lyft, not with a vehicle sharing company like Getaround or RelayRides. If you damage your car or harm someone while using it for money--expect to be on the hook for the resulting claims.

Car-pool where you all share the expenses for gas and upkeep of the car: YES.
Using your personal vehicle for business like pizza delivery or seeing clients: YES (thanks to the Class '30' for business use).
Using your car to help pick people up for your church or a local organization: YES.

Getting notified by Uber to pick up someone to take them from Harvard Square to Fanueil Hall in Boston for $25: No, no, ten thousand times NO.

Lending your Silverado to your cousin Marty to go to Ikea: YES.
Lending your Silverado to your cousin Maria from out of town to go to the store: YES.

Renting your Silverado out for four hours at $85 to someone to run errands or drive to Vermont and back: No, no, fifteen thousand times NO.

Now, some of these companies do offer some insurance if you use their services as a provider. Lyft offers coverage for their drivers for up to $1 million in property damage and bodily injury and even some for liability; so does Turo. BUT it does not apply to every state. Just like some of the auto carriers you see on television advertising their services, Massachusetts is usually not one of those states.

No matter how tempting the idea of using your off time to play chauffeur for pay--the Massachusetts Personal Auto Policy does not give you coverage for damage, liability or bodily injury if you are in an accident, regardless of who caused it. And don't expect your personal umbrella policy to kick in either; ALL business endeavors are excluded from it as well.

Eventually, insurance might catch up with the marketplace in regards to these services, but in the here and now--there's no coverage. If you choose to operate your vehicle with these services, you're taking a very big risk on your hands. If you have questions, you should ask your friendly neighborhood insurance agent (that's us!) before you start downloading an app and planning for that Carribean vacation or getting that 55 inch tv with all your extra funds. 

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