The Dangers of Ride Sharing

The recession was hard on everybody, but especially so for Generation Y. Millenials came up with a creative answer to the hardships though, and it came in the form of a sharing society. Now many people are sharing their physical assets for a fee. Most notable are companies like Uber who are lining up drivers with people who need rides. While it's a great idea in theory, find out why you should be very careful when using these services.

The turmoil wrought by the recession wreaked the most havoc on Millennials. The housing bubble popped, and that burden was coupled with Gen Y’s crippling student debt (25% of Gen Y has a university degree!). The burdens were great, but with their perseverance, they found new ways to make ends meet, and one of those was ride sharing.

With ride sharing services, car owners can become drivers who can give rides to people, similarly to how a taxi operates. Someone needs a ride, the driver is notified by the service, they give the ride, and they get paid to do so. Payment is automatically handled through the app, making for a very sleek, convenient service…on the surface. However, if you dig down into the risks of these types of services, it shows some major problems.

Let’s start with those who drive others. Using your car as a pseudo-taxi is a nice way to make a little spending money in your free time. However, your Personal Auto Policy will not cover you when someone is paying you to provide them with a ride. Every Personal Auto Policy excludes ‘livery’ use—transportation for a fee—which opens up all sorts of problems. If you have Comp & Collision coverage, you won’t be covered when you’re giving a ride. Additionally, if you cause an accident, your insurance won’t pay for any property damage caused, and it won't pay for the bodily injuries of the people you’re transporting nor for the people you hit. You'll need to check with the provider on what their insurance covers. With Uber and Lyft, they provide liability coverage while driving someone and will provide comprehensive and collision coverage if you also have those coverages on your Personal Auto policy.

If you're currently a driver or looking into being one, check with your agent to find out what is and isn't covered, and work with them to fill any gaps. Spend the time to ensure that you're protected!


Colten Zamrzla, CPCU

Colten first started in the insurance industry in 2010. He then pursued a Bachelor's degree in Finance & Insurance from the University of Nebraska at Lincoln. Once graduated, he immediately started studying for the CPCU and achieved it in just shy of a year. He is solely focused on commercial insurance, able to assist all types of businesses and nonprofits in risk management.

Colten has dedication and passion for his clients and the insurance industry as a whole. He dedicates time to furthering his knowledge on all things business and insurance, and he volunteers for the Independent Insurance Agents of Nebraska, a state-based trade association.