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Insurance issues related to the sharing economy

The sharing economy has become an increasingly large presence in our society. It involves services in which individuals share goods/services with others in exchange for money. This includes room-sharing services like Airbnb and ride-sharing services like Uber and Lyft. An increasing number of individuals are turning to the sharing economy as a way to make some extra income.

The sharing economy raises some special issues when it comes to insurance. This is because activities related to offering goods/services through a sharing service may not be covered by a person’s traditional insurance policies. For example, traditional homeowners policies may not cover incidents related to paying guests of homeowners who are providing room-sharing services and traditional auto policies may not cover incidents related to paying passengers of drivers who are providing ride-sharing services.

Thus, to have the level of insurance coverage they desire, a homeowner or driver who is participating in a ride-sharing or room-sharing service as a provider may need to get special insurance.

When a person who is sharing a room or a ride through a sharing service doesn’t have an accurate picture of what sort of coverage they do have, it could lead to them making an insurance claim for something that isn’t covered under their policy. Such claims can sometimes develop into major disputes for insurance companies. Another type of sharing-economy-related dispute an insurer could find itself in with a policyholder is a dispute over whether a given individual who was in the policyholder’s house or car was in fact a paying sharing-service guest or passenger.

As the sharing economy continues to grow and develop, it will be interesting to see what happens with overall policyholder knowledge of the insurance concerns related to sharing service participation and what insurance companies will do in response to such growth/development to try to lower the likelihood of sharing-service-related disputes arising with their policyholders.

Source: ArkLaTexHomepage, “Sharing economy exposes summer travelers to insurance risks,” July 21, 2016

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