Ridesharing has become quite common in today’s fast-paced world. It saves wear and tear on the rider’s vehicle and will allow you to make a little money on the side. One thing that can be confusing for both the driver and their passenger is how car insurance works when one person pays the other for a ride. Do you need commercial coverage since you are using your vehicle for business, or will the passenger’s insurance cover their medical expenses if they are injured during an accident? This article will discusses some aspects of getting car insurance if you work in a ride sharing service.
What Is Ridesharing?
Ridesharing is similar to a taxi service because individuals offer rides to passengers who pay for the service. However, it is different because the person who is offering the ride will be using their personal vehicle to transport the person wanting the ride. Money is exchanged between the two parties, which makes it a commercial transaction. Ridesharing is a great way to make extra money if you are fully prepared to run your enterprise as a commercial business.
Determining Your Risk Level
Your insurance premiums are dependent on your level of risk. When you use your car for personal trips, you can keep your risk relatively low. Using your car for ridesharing purposes will expose you to a much higher level of risk. It also turns your car into a commercial vehicle. This means you may want to purchase additional insurance. Your personal insurance may not cover someone who is paying to ride in your vehicle. Once they pay money for your service, a business transaction is conducted, and a commercial insurance policy is recommended.
Coverage Through the App
You may have some level of insurance that is issued to you through the ridesharing app. The problem is it normally isn’t enough. It will only cover your vehicle while your app is open. From the time you pick up the order, drive to the client and deliver them to their destination, your app is open, and the insurance will be in effect. Even though it is in place, you may not have all the coverage you need. Talk to your insurance agent to determine how much coverage you already have and what type of coverage you may need to purchase.
Who Covers What?
Before starting a ridesharing side job, you will need to discuss your current coverage with your insurance agent. Unless you have a commercial policy to cover the times when you are carrying passengers, you may not be fully protected if an accident happens. Your passenger may have some type of personal coverage, but it is up to you to make sure you have enough coverage to protect yourself.
If you start a ridesharing business, you will need to upgrade your insurance coverage for the times when you have to pay customers riding in your vehicle. The insurance experts at Duane Weber Insurance can help you figure things out. Call our team to talk about what you need to do to remain fully covered during your new business venture. We will create a policy that will work for you and allow you to maintain sufficient coverage.