Commissioner Doak: Sharing for the summer? Know your insurance risks

By John D. Doak
Oklahoma Insurance Commissioner

Nearly 75 percent of Americans will take a vacation this summer. Many of us will use a ride-sharing or hosting service like Uber, Lyft, Airbnb or Homeaway. They are easy to use and often cheaper than their traditional counterparts. But this booming industry poses risks for both the user and provider. Whether you’re taking a ride-sharing trip across town or renting out your home to some vacationers, make sure you understand the insurance risks.

Hosting Services
Home-sharing or peer-to-peer rentals are sites where people rent out rooms or entire homes for extra income. Guests pay for the stay like a hotel. The difference is that the property is privately owned.

Review your personal policies. If you are staying in a house or condo through services like Airbnb or Homeaway, confirm your own homeowners, renters or personal liability policies. They can offer protection for potential damages to the rental property. If not, make adjustments as needed.
Purchase the right coverage. If you are considering renting out rooms for a profit, know that many homeowners’ policies won’t cover property damage caused by or injuries to a paying guest. Talk to the home-sharing service and why not look here or to your agent to decide if additional liability coverage or special landlord insurance is needed.
Ask for proof. Consider only renting to guests who show proof of homeowners, renters or personal liability insurance. If a guest damages rented property, hosts can report a claim on the guest’s policy.

Ride Sharing
Companies like Uber and Lyft connect drivers in their personal cars with people who need rides. Passengers and drivers can screen each other, schedule rides and collect payment through an app.

Research before riding. Before hopping into a hired car, know the extent of protection in case of an accident. Most ride-sharing companies have liability policies to cover any passenger injuries. If you are hurt in a wreck during your ride, file a claim with both the driver’s insurance and the ride-sharing company’s insurance. They will sort out who is responsible for your injuries.
Ask your insurer. Before signing up as a ride-share driver, talk to your insurance company and review their road risks policy. Personal auto insurance typically excludes liability coverage for business use when a personal car is being used to transport people for a fee.
Review the company’s policies. Some ride-sharing companies provide primary insurance. Uber and Lyft also offer contingent collision and comprehensive coverage that takes effect when the driver accepts a ride request or has a passenger in the vehicle. There are also some insurance companies that cover uber drivers, allowing them to compare uber insurance policies for their cars.

Goods & Services for Hire

Lenders and borrowers advertise and rent personal items like power tools, golf clubs or even designer dresses online. Another example is someone who seeks help with tasks like packing boxes or housecleaning.

Require a security deposit. When lending goods such as high-fashion clothing or a bicycle, get a security deposit to cover any losses. Capture photos and other information in a home inventory.
Make sure it works. You can be held liable for renting out items that are known to not work properly. A homeowner’s policy may not cover the transaction because payment was exchanged for rented goods.
Know who’s paying. Hiring a stranger to help with home cleaning, moving or other tasks through sites such as TaskRabbit? Find out whose insurance covers what. The service may offer a guarantee, but often it is secondary to any insurance you already have in place.

The sharing economy offers new and exciting opportunities. Just make sure you are well-versed on the insurance implications to keep you and your property safe. For more insurance information, contact the Oklahoma Insurance Department at 1-800-522-0071 or visit our website at www.ok.gov/oid.