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Join the sharing economy – but check your insurance first

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June 5, 2015
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From car-pooling to home-swapping and couch-surfing, more and more people worldwide are taking to the sharing economy.

Whether it’s to save money on petrol or holidays, or just to be part of a growing movement to make new friends and spread the love, research has estimated that Britain now has more than 30 million adult sharers.

But while this booming sector can reap its users rewards both financial and spiritual, specialist insurance broker Adrian Flux is warning sharers that failure to advise their insurers of their habits could leave them out of pocket.

Car sharing is one of the simplest ways to save money on fuel costs, and websites like BlaBlaCar have enabled people making the same journeys to hook up and share the ride easier than ever before.

All of which is great, and won’t cause a problem for your insurers – unless you start to make a profit from your activities, which effectively turns your vehicle into an unlicensed private taxi, an insurance category known as “hire and reward”.

In the event of an accident, your insurer is well within their rights to refuse to pay the claim, and the police and local council may want a word too for flouting the laws around private hire vehicles.

The other major growth area in the sharing world is house-swapping, or simply making your home, a room, or even just a couch, available via websites such as airbnb, Love Home Swap, and Couchsurfing.

Here at Flux, we are well versed in providing cover for more traditional holiday lets or rented accommodation, so there’s no issue with sharing your home in this way – as long as you let your insurer know you’re part of such a scheme.

Flux general manager Gerry Bucke said: “We already have a number of properties on the books where the owner rents rooms or sometimes their whole house, either for a fee or part of a house swap.

“But, as with almost everything involved with insurance, it’s important that you disclose all relevant information so that the property can be rated correctly and the proper premium charged by the insurer.

“Cover can be compromised if we don’t know all the facts and something untoward happens.”

Although companies like airbnb offer their own Host Guarantee, this only covers damage caused directly by the person staying in your home, so you will still need conventional home insurance for all other damage.

The Host Guarantee doesn’t provide cover for money (or gold bullion if you happen to have any lying around!), and insurance companies will typically exclude theft by renters unless there is evidence of violent or forcible entry to the property, so it’s always best to remove cash or other valuables when sharing or renting your home.

If you have any queries about sharing your home or car, call Adrian Flux today.

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