A new trend in urban and suburban communities is the Shared Ride or Uber Type arrangement. In this arrangement, a person signs up to use their personal vehicle to drive others to their destination, similar to a cab. They then log on and receive an assignment to drive someone to their destination. The passenger pays the service for the ride. The driver is then compensated for the ride by the service.

Please be aware that the standard Personal Auto Insurance Policy has an exclusion applicable to this type of arrangement. The wording may be similar to this:

Liability Coverage Does Not Apply…
“to any automobile while used as a public or livery conveyance. This exclusion does not apply to car pooling on a share the expense basis.”

The carrier response to date is that this does not fit the “car pooling on a share the expense basis.”

In college towns, these arrangements can be especially attractive to students looking to earn additional cash.

A similar exposure could develop over the use of your family vehicle for delivery such as pizza or other fast food. Your family auto insurance does not cover this. A separate exclusion is needed for this because liability coverage does not apply.

Be sure to check with your insurance agent and also review the contract with the ride service or employer to assure that you and your family are adequately protected from a loss arising out of such an arrangement.

Grooms Insurance Associates is proud to have been named Business of the year for 2013 by the Lake Zurich Area Chamber of Commerce. Thanks to our friends and clients for helping make us achieve such recognition.