It seems simple enough. Using your car to make extra money by driving for Transportation Network Companies, or TNCs, like Uber or Lyft. Or renting out your vehicle through a peer network ride-sharing service when it would be idle otherwise.
“But before you begin using your personal vehicle to generate income, it’s important to check whether your current insurance policy will cover what you’ll be doing,” says Joan Bates, a Vice President at Bates Insurance Agency Inc. “In all likelihood, it won’t.”
Personal auto policies in Massachusetts don’t provide coverage for anyone injured while riding in your car when it’s being used for ride-sharing as a public or livery conveyance. When your car is being driven for TNCs in which people “hail rides” electronically through cellphones, your personal auto policy also doesn’t cover property damage and all “optional insurance parts” _ things like medical payments, optional bodily injury, collision, comprehensive and underinsured auto bodily injury.
And, if it’s your “job” driving for a TNC or ride-sharing service _ like Uber or Lyft _ you’re not even eligible for a personal auto policy.
The bottom line: Although UBER and Lyft do provide, or offer, liability coverage, it’s best to consult with your insurance agent to fully understand your insurance options and coverages before signing on as a driver.
Another option that has become more popular is renting personal vehicles through ride-sharing services like FlightCar, RelayRides and GetAround.
Basically your car is on “loan,” for which you’ll receive a rental fee for each use.
“A personal auto policy wouldn’t cover a loss if your vehicle is being rented out, since that’s not included as part of your insurance,” Bates says. “A business auto policy, at a higher cost, would be required.”
Zipcar is the most common car share service company renting cars by the hour or day. Members are free to drive Zipcars that are available in neighborhoods, cities and airports around the world.
“If you have a personal auto policy that policy would follow you when renting a personal automobile…as long as you’re not regularly using the same car,” Bates says. “That coverage is not worldwide, though, and would be limited to accidents in the United States, its territories and possessions, Puerto Rico, and Canada.”
For those who regularly rent the same car, a “use of other auto” endorsement also would have to be added to your personal auto insurance policy.
If you are a passenger in a ride-sharing vehicle, like Uber or Lyft, or in a car someone else is renting through a service like FlightCar or Relay Rides, your policy’s personal injury protection, uninsured motorist, optional bodily injury, medical payments and underinsured motorist coverage will follow you. Your policy would not be primary, however. The owner’s policy would pay its limits first.
“Certainly if you are planning to make money offering rides, or regularly use, any of these ride-sharing services it’s always best to check your policy first,” Bates says. “Or even better, contact your local insurance agent with any questions. We’re always here to advise you.”