July 21, 2016


Sharing Economy Exposes Summer Travelers to Insurance Risks

As the U.S. summer travel season peaks, consumer use of sharing platforms continues to climb. Global revenue from sharing services will hit $335 billion by 2025, according to PricewaterhouseCoopers. With nearly 75 percent of Americans vacationing this summer, Insurance Commissioner Jim Donelon advises consumers to understand the insurance risks of the sharing economy.

“These new platforms offer opportunities for complete strangers to share everything from rooms in their homes to a ride home after dinner,” said Commissioner Donelon. “But failing to understand the insurance aspects of these sharing services can be financially risky. The Louisiana Department of Insurance encourages consumers to do a bit of homework before renting out a room in their home or signing up as a driver for hire or any similar activity.”

 Consider the following insurance tips before entering into any home-sharing agreement:

  • If you’re renting out a room in your home, purchase the right coverage. Regularly renting out rooms for a profit may be considered a home-based business. As many homeowners policies won’t cover property damage caused by or injuries to a paying guest, hosts should talk to the home-sharing service and their own agent to determine if additional liability coverage or special landlord insurance is needed. Some home-sharing companies offer host protection guarantees to cover disputes between owners and renters.
  • If you’re booking a room online, review your own personal policies. Consumers staying in accommodations secured through an online service should confirm that their homeowners, renters or personal liability insurance policies offer protection for potential damages to the rental property. 
  • Check the terms of use. Home-sharing user agreements can change. Read the fine print every time.

Consider the following insurance tips before entering into any ridesharing agreement:

  • Ask your insurer. Before contracting as a driver for a transportation network company such as Uber or Lyft, consumers should consult their insurer. Personal auto insurance typically excludes coverage for business use or when drivers are “available for hire.”
  • Review the company’s policies. Some ridesharing companies provide primary insurance. Uber and Lyft also offer contingent collision and comprehensive coverage that takes effect when the driver accepts a ride request or has a passenger in the vehicle. However, drivers must purchase these coverages on their personal auto insurance if they want coverage during ride-sharing activity.
  • Fill the gap. Several insurers offer products to fill any coverage gaps for rideshare drivers. Premiums, types of coverage, limits and availability vary by state. Your insurance company or agent can answer specific questions about what is and is not covered.
  • Research before riding. Before accepting a shared ride, know the extent of protection in the event of an accident. Most ridesharing companies have liability policies that cover any passenger injuries. If injured while riding, report a claim with the driver’s insurer and the ridesharing company’s insurer.

For more tips and information, you can check out a Consumer’s Guide to Homeowners Insurance and a Consumer’s Guide to Auto Insurance, as well as the frequently asked questions  on the Department of Insurance website

 About the Louisiana Department of Insurance: The Louisiana Department of Insurance works to improve competition in the state’s insurance market while assisting individuals and businesses with the information and resources they need to be informed consumers of insurance. As a regulator, the LDI enforces the laws that provide a fair and stable marketplace and makes certain that insurers comply with the laws in place to protect policyholders. You can contact the LDI by calling 1-800-259-5300 or visiting