The "Sharing" Economy: Issues Facing Platforms, Participants, and Regulators A Federal Trade Commission Workshop
I want to share the following concerns I have about such things as Uber, Airbnb, HomeAway and similar programs. On the surface the idea of making a little extra money by offering rides or lodging to individuals in my personal auto or personal home sounds interesting. I am a Property/Casualty insurance agent. Because I understand insurance and 90% of the people purchasing auto or home insurance don't I want to highlight a big problem. ALL Personal Auto policies and ALL Homeowners insurance policies contain an exclusion on "Business Use" of Autos or Homes. In some very narrow circumstances these policies can be extended to provide some coverage. In the case of Uber, Airbnb, etc. most companies will not expand their coverage to include these exposures. Here's what happens. A homeowner decides to sign up with Airbnb and starts accepting guests. Everything goes along smoothly until one day a guest has a bad fall and files a claim with the homeowner who in turn calls his insurance agent. That's when the agent tells him he has no Liability coverage because he was running a business out of his home and his policy excludes business uses. In the case of an automobile he's running a taxi service with his personal auto. In this example the owner might cause a serious accident while transporting an Uber customer. ALL claims get denied. One of the purposes of a government is to help protect it's citizens. With taxi companies and lodging properties they usually make insurance a requirement to be licensed to operate. With Uber, Airbnb, etc. there's no way a local or State government could regulate this effectively. It looks to me like the only ones who will benefit from these operations are the Uber's and Airbnb's who get a fee and probably can't be shown to have Liability for an accident (it wasn't their car or house). The ones who get hurt are the people who sign up with Uber or Airbnb not realizing the Liability exposure they have. Also the consumer is a looser unless the home or auto owner have deep pockets. In that case the service provider probably wouldn't sign up because they don't need the extra cash. Unless someone can come up with a good solid and manageable way to regulate this I don't think it's in the best Public interest to allow these operations.