Are you covered the car

Mobile apps have made it possible to turn your personal vehicle into a source of revenue. More drivers are relying on ride sharing apps such as UberX and car-sharing programs such as RelayRides to make a little extra cash on the side, either by chauffeuring passengers or renting by out their cars.

But when it comes to insuring a car that you’re using for moonlighting purposes, things can get tricky.

Car sharing and ride sharing have created havoc in the private auto insurance market, with some insurers and state regulators scratching their heads over who foots the bill if someone gets into an accident.

“There’s a big public policy debate on how to insure this,” Michael Barry, vice president of media relations for the nonprofit Insurance Information Institute in New York.

While both relatively new concepts in the auto insurance world, car sharing and ride sharing are two different things, and insurance experts say it’s important for consumers to understand the difference between the two.

Car sharing is the sharing of private passenger vehicles, similar to a car rental service. FlightCar, GetAround and RelayRides are a few examples.

Ride sharing connects riders with drivers who use their own cars to transport them and is analogous to a taxi service. A few of these programs are Lyft, Sidecar and UberX.

Generally, neither ride sharing nor car sharing is considered by traditional personal auto insurance rating plans. Most personal auto ratings reflect driver characteristics such as driving record and vehicle type – not whether those drivers are selling rides or renting out their cars.

Ride sharing: When does coverage kick in?

Between the two sharing services, ride sharing has sparked the most debate as far as personal auto insurance goes.

“The concern was and still is that a private passenger policy was never intended to cover someone who is engaging in a commercial enterprise,” Barry says.

The question at the center of the debate: At what point does the coverage kick in? It could be anywhere between the time when the ride-share app is first turned on – and a driver sends the signal to Uber or Lyft that he or she is available to offer rides – and when the app is turned off and the person reverts to driving passengers privately.

“The private passenger market says you’re now engaging in a commercial enterprise. You might not have someone in the car, but you’re engaging in a commercial enterprise and driving around with a passenger policy that says you can’t do that,” Barry says.

One of the more high-profile instances of the ride-share insurance gap involved a fatal accident in 2014, when 6-year-old girl who was killed by an Uber driver in San Francisco. The family’s attorney said Uber denied insurance protection that would have covered the family and the driver, and the family ultimately filed suit against both Uber and the driver.

Uber maintained that the driver was not providing services on the company’s UberX system because he did not have a passenger with him.