The sharing economy is rapidly gaining popularity. PricewaterhouseCoopers expects it to hit $335 billion in global revenue by 2025. Before you jump in on peer-to-peer transactions, understand how they work and how to avoid financial pitfalls.
Ride-sharing companies such as Uber and Lyft connect individual drivers with people who need rides. Passengers and drivers can screen each other, schedule rides and collect payment electronically.
Home-sharing or peer-to-peer rentals are sites where people rent out rooms or entire homes to guests for extra income. Guests find a property online and pay for the stay like a hotel. The difference is that the property is often a privately owned apartment, condo or house. Anyone can register as a host or guest.
Goods & Services
A smaller segment of the sharing economy involves the lending of personal items for a fee. Lenders and borrowers advertise and rent items like power tools, golf clubs or designer dresses online. Or, someone seeks help from another individual online to help with tasks like packing boxes or housecleaning.
FAQ & Questions
Questions? We’ve got you covered.
Does my homeowners policy cover guest injury and property damage?
Many homeowners policies won’t cover guest injuries or property damage. Talk to the home-sharing company and your own agent to determine if you need additional liability coverage or special landlord insurance.
Can I give guests a list of house rules?
Set boundaries. Let guests know what items they can and can't use. It's not uncommon for a host to lock certain rooms that are used for storage, etc. Don't be afraid to charge them for damages.
What if I don't feel comfortable with the person renting?
Trust your gut. You always have the option to turn down potiential guests.
Questions about your policy?
Ask your agent
- If paying guests cause damage when renting, will my policy cover property damage?
- What kind of insurance coverage do I need before driving for a ridesharing service?
- What if I’m injured in an auto accident while a passenger in a ridesharing vehicle?
- How is my property covered if I hire someone to help with moving, house cleaning or handy work?
- What if the person who rents my personal items loses or damages those items?
Tips & Tools
Be prepared before you share.
Proof Of Insurance
Consider only renting to guests who show proof of homeowners, renters or personal liability insurance. If your property is damaged you can report a claim on your guest's policy.
Before Booking A Room
Review your personal policies. Confirm that your own homeowners, renters or personal liability insurance policies offer protection for damages you cause.
Read The Fine Print
Home-sharing user agreements change often. Be sure to read the fine print every time you engage.
Before You Drive For Uber or Lyft
Talk with your insurance company. Be aware personal auto insurance typically excludes coverage for business use or when drivers are "available for hire."
Fill Coverage Gaps
Fill coverage gaps for instances that aren’t protected by the ride-sharing company or your personal auto policy. Premiums, type of coverage, limits and availability varies by state. Check with your insurance provider to find out more about what’s covered.
Before Getting In The Car
Know the extent of your protection in the event of an accident. Most ride-sharing companies have liability policies to cover any passenger injuries.
When lending goods like high-fashion clothing or a bicycle, be sure to get a security deposit to help cover any losses.
Before Renting Out Personal Items
Capture photos and other information in a home inventory. Be mindful that for some items, you may not be able to locate an exact replacement.