If you have a vehicle and some extra time, signing up for a ride-sharing service to earn some extra cash sounds like an easy gig – but before you buckle that seat belt there are a few things you should know about ride-sharing services and your car insurance.
With hints of popular ride-sharing services, making their way into Iowa, there have been many opinions voiced on the topic. Some would welcome the service as a much needed convenience, while there are others who question the safety of the program. Setting these two arguments aside, there is one important factor that anyone considering participating in a ride-sharing program should know – and it has to do with your auto insurance.
Ride-sharing services such as Uber allow people to use their own vehicle to offer rides to others in a community car-pooling service. Those looking for a ride can locate and request a driver from a mobile app. Like a taxi, ride-sharing drivers are compensated for their service.
Iowa’s Insurance Commissioner Nick Gerhart warns any drivers in Iowa that their personal auto coverage may not cover them if they use their vehicle for this service. “Programs such as Uber, Lyft, VRBO and Airbnb may offer consumers great service and convenience, but as a regulator, I want potential providers and users to be aware of the very real problems they could face without knowing about these restrictions,” Gerhart said in a statement.
Depending on your current auto policy, you may be required to seek commercial insurance coverage for your vehicle to cover any damages while performing a ride-sharing service. Even if the service company states they offer commercial coverage for their ride-sharers, it’s important to review your coverage with your agent to make sure you’re protected.
Cities in Iowa have yet to allow ride-sharing services to set up shop, but Uber has already started advertising for drivers in Des Moines and Iowa City prompting this warning from the Iowa Insurance Division: “If you are considering becoming a driver/ride provider, the Iowa Insurance Division suggests that you visit with your insurance company or insurance agent before you sign up for car-sharing or ride-sharing,” the statement read.
For more information on your coverage, contact your AW Welt Ambrisco Insurance agent at (319) 887-3700.