Editor’s note: Steven A. Meyerowitz, Esq., is a director of FC&S Legal. FC&S and PC360 are both owned by Summit Professional Networks.

The Nebraska Departments of Insurance and Motor Vehicles are urging caution before people sign up for Internet services that connect drivers, riders and vehicle owners for car-sharing and ride-sharing.

According to the state regulators, these fee-based services may pose “hidden risks” if the rider, driver, or vehicle does not have insurance coverage for that activity. In a statement, they said, “If an accident occurs while someone else is riding with you or driving your car, the typical private passenger automobile policies may not provide coverage for any liability incurred. Those who ride-share with passengers or own a car-share vehicle may need commercial coverage.”

Moreover, the Nebraska regulators added, drivers who car-share “may want to get their own ‘non-owned vehicle’ policy if they drive other people’s vehicles to be sure they are protected. Typically, a commercial automobile insurance policy is necessary to provide a vehicle for rent or to transport property or passengers for compensation.”

The regulators added that a “traditional car-pooling arrangement by friends or neighbors who share the cost of gasoline or take turns driving” was not the situation they were addressing, and that those types of arrangements “typically are not a problem.”

The departments suggested that individuals speak with their insurance company or insurance agent before signing up for car-sharing or ride-sharing and:

  • Review carefully any type of agreement involving car-sharing or ride-sharing.
  • Before deciding to rely on insurance that is provided by others, that they are sure to get a copy of the policy and ask an insurance professional to make certain it covers all of their exposures.
  • If using such a service, that they evaluate who may be responsible for injuries and whether coverage will be available.   
  • Talk to the insurer or agent to see what is and is not covered. The exclusions in a personal automobile policy for this type of use “will likely apply to all types of coverage including liability to third persons, uninsured and underinsured motorist coverage, medical payments for people using or occupying your vehicle, comprehensive physical damage coverage, collision physical damage coverage, and limits on the insurance company’s duty to defend you in a lawsuit.”
  • If the car-sharing or ride-sharing service provides some type of “umbrella” insurance, that they find out if that coverage includes the duty to defend them in a lawsuit arising from the car-sharing or ride-sharing. 

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