Taxi-like ride sharing is an emerging trend lead by operations such as Lyft, Sidecar and Uber. It is important to note that ride sharing is different than carpooling. Carpooling, a covered exposure, is understood as two or more persons sharing a ride to and from work on a regular basis. These carpools are pre-arranged and repetitive, following a work schedule, and are not for a fee (other than possibly contributing to gas expenses).
In contrast, ride sharing operations are not covered under most automobile and personal umbrella liability policies. Ride sharing is arranged through a commercial reservation system, whereby someone reserves the use of another’s personal auto along with the auto’s owner as the driver for a fee, just like a taxi or limo service. Hence, ride sharing replicates a taxi or limo service, which is commercial in nature. While operators could request a donation instead of a fee, both are considered to constitute use as a public livery or conveyance, which is excluded under a personal auto policy. A personal auto policy expressly excludes any loss if the covered vehicle is used to perform these services, and any personal umbrella policy would also not provide coverage.
Some services, like Uber, provide insurance that covers liability exposure for the driver while logged into the company network. If coverage is provided, you would be subject to the liability limits provided by the ride sharing company. Your personal umbrella liability policy would not respond. What about damage to your vehicle in the event of an accident? You may be on the hook.
If 15 minutes or less is your primary criteria for selecting an insurance company – you may want to think again. Before your put your personal assets at risk, contact an insurance professional.