Lots of our clients in Pennsylvania and Maryland are looking for ways to make a little extra money these days. One popular way is by being part of the sharing economy. That's when individuals start their own business by "sharing" their home or auto. Popular versions of this include renting out rooms in a home via Airbnb or using a personal vehicle to become a driver with Uber.
If you are considering either of these options, it's important to understand how to protect yourself from risk with the right insurance coverage. Remember, when you go into business in the "sharing" economy, it can mean serious exclusions on your home or auto insurance. That's why it's so important to call your Keller-Brown Insurance agent before you start so we can offer an insurance solution for your needs.
In this article, you'll learn how to protect your home and car if you are considering making extra money via home sharing, ridesharing, or delivery driving.
Homesharing
Homesharing is when individuals rent all or a portion of their home to strangers for a short period of time. Also known as short-term rentals, homesharing has become increasingly popular for individuals looking for extra income.
It's estimated that over 600,000 Americans rent out their homes or private property to short-term guests. Around 14,000 Pennsylvanians rent out their homes through Airbnb, and that's just one of the platforms available. In Maryland, it's no surprise that Baltimore was the most popular short-term rental area, hosting 131,500 guests in 2019.
If you are contemplating offering your home as a short-term rental, you may think your current homeowners insurance policy is all the protection you need should there be any incidents of damage, theft, or someone getting injured on your property. In reality, homeowners insurance is intended solely for properties that are owner-occupied.
Once you start renting out your home, even if it's only a room and you still live on the premises, homeowners insurance may limit or deny your claim because you are using the home to produce income.
The same is true for a vacation property that you may want to rent out when you're not there. These exclusions mean you would be forced to pay out of pocket for any claim—from a guest slipping and falling to a plumbing catastrophe—and that can put you at tremendous financial risk.
The good news is the right insurance coverage can minimize your risk when the unexpected happens. ERIE, one of the top-rated insurance companies we represent, offers Home Sharing Coverage. This is an affordable optional add-on to a homeowners insurance policy that can provide you with broad coverage for renters. It also covers:
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Property damage (due to things like fire or a windstorm)
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Theft
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Liability claims
To make sure your homeshare doesn't end up costing you money, call Keller-Brown Insurance Services today to discuss your options for short-term rental insurance. Our insurance agents will talk to you about your specific situation and help you choose the best option to protect you and your property.
Rideshare and delivery drivers
Ridesharing is when you use your personal vehicle to pick up passengers and drive them to their destination for a fee. Ridesharing companies like Lyft and Uber have made it easy to start using your car to make extra money.
It's estimated that there are about one million Uber drivers in the US and Philadelphia is among the top 10 Uber markets. In 2021, Maryland Uber drivers earned about $37,000, according to a Salary.com survey. Pennsylvania Uber drivers earned about $36,000, said Salary.com.
If you're currently ridesharing or considering it, here are a few things you need to know about insurance coverage.
First, once you start using your vehicle for business purposes, your personal auto insurance may not provide the coverage you need. In fact, your current policy may include an exclusion that prohibits you from using the vehicle when transporting people or goods for a fee.
In that case, you can either add an endorsement to your personal policy or consider purchasing a commercial auto policy. And don't be fooled by Lyft and Uber claims that they've got you covered when it comes to insurance. While both provide insurance coverage of up to $1 million, there are lots of exclusions you need to be aware of.
For example, say you've dropped off a passenger and are waiting for another call when your car is side-swiped by a hit-and-run driver. Both companies consider that time "off the clock" and neither provides coverage if you are in an accident while you are waiting for a pickup call. Additionally, Uber may have higher comprehensive and collision deductibles compared to your personal auto insurance.
Companies like Grubhub, which connect drivers with local restaurants, have also become a popular option for Pennsylvania and Maryland residents looking to supplement their income. While some companies have coverage solutions for ridesharing, most personal auto policies do not have a coverage option when you're using your vehicle in a delivery capacity.
Rideshare insurance may be purchased as an add-on with your current auto insurance provider. If your current provider doesn't offer rideshare, you will need to switch to one that does, because the rideshare option is not offered as a stand-alone option.
At Keller-Brown, we will work with you to fill the gaps between your personal auto insurance policy and the rideshare company's policy so you are covered during every part of the ride. We can also provide a quote for a commercial policy if that is what's needed.
Your home and your automobile are among your most expensive and prized possessions. Making sure you have the right insurance coverage in place reduces your risk and provides peace of mind.
Do You Have Questions about Homeshare or Rideshare Insurance?
Contact an insurance agent at Keller-Brown Insurance Services today to answer any questions about your insurance needs if you are homesharing, ridesharing, or delivery driving. We will provide a free review of your existing coverage and an insurance quote if you need additional protection. As an independent insurance agency serving Pennsylvania and Maryland, we represent several top-rated insurance companies. We have the flexibility to find you the right coverage at competitive premiums for home, auto, business and more.
