Oregon Commish Says ‘Sharing Economy’ Creates Insurance Challenges

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Typical insurance policies won’t cover people participating in the “sharing economy” by renting out their home or using their car for a driving service, Oregon’s insurance commissioner is warning.

The state’s insurance regulator had previously stayed quiet about the ways Oregonians might or might not be covered while using services like Airbnb or Uber.

Those services are part of an emerging movement to let people use their homes, cars or other resources to create an income stream, usually through an app or website.

“When a new industry emerges, it often creates unique insurance situations,” Insurance Commissioner Laura Cali said in a statement. “Consumers should be aware that traditional insurance policies may not apply when participating in a new kind of business.”

Homeowner policies might cover occasionally renting out a room in the home, according to the insurance division, but likely not making a room or the entire house available regularly for rental. That would be considered a business use.

Most insurance companies have coverage available for landlords, the division said.

People renting in homes through services like Airbnb, however, are likely covered in the event of damage to belongings. Homeowner or rental insurance policies treat the stay just like one in a hotel.

Airbnb doesn’t offer liability insurance in case of injury or property damage. It does, however, offer a non-insurance “Host Guarantee,” which it says covers damaged property up to $1 million.

For drivers using services like Uber, Lyft, and Sidecar to connect with a paying passenger, personal insurance policies won’t cover damage or losses.

But most of the ride-sharing services offer varying levels of commercial insurance depending on whether they’re signed in to the app or have picked up a customer. The insurance division recommends getting familiar with the service’s policies.

Passengers won’t be covered in case of injury by their own insurance policies, nor the personal insurance of the driver, the insurance division said.

After a February incident in San Francisco where an Uber driver who hadn’t picked up a passenger killed a six-year-old girl in a crosswalk, the company said it would close the “insurance gap” by agreeing to cover any liability the driver’s personal insurance wouldn’t. The company originally said it shouldn’t be held liable.

This week, California Gov. Jerry Brown signed legislation requiring companies like Uber to cover liability when drivers are signed into the ridesharing app. The new law also boosted the minimum amount of insurance those services are required to carry in California.