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Lyft vehichle

Photo by Alfredo Mendez

There are more potential problems with Uber and Lyft that keep emerging. Well, let’s put it this way. There have always been problems they are just now becoming apparent.

Bottom line in this sharing economy—the lines are blurred between personal use of your home, auto, talents and business use.

When you catch a ride with someone, you may not be covered in the event of an accident. No coverage. That’s risky. If you’re renting a home using VRBO or AirBnB, you may also not have protection against fire, etc. The reason is that even if you have insurance or the Uber driver has insurance, in the event of a claim, the insurance company could decide this was a “business” exchange, and in that case, your, or their, personal insurance would not cover the accident.

Doesn’t that make sense? When you drive your car on errands and to work you have much less driving time than a taxi driver—right? A taxi driver pays a lot more for insurance than you do. It’s called “rate for risk.” So insurance companies exclude business use from personal insurance policies. Then the line is not blurry. Unfortunately, these lines used to not be blurry, and the insurance industry is slow to react to new things.

We know for sure that there are laws that require insurance protection for taxis and hotels. We are still in the wild west with the sharing economy. So ask questions, be careful!