May 19, 2020 Articles

Oversharing? Challenges and Gaps in Insurance Coverage Where the Sharing Economy Meets Reality

An examination of three particularly visible and important areas of the sharing economy and related insurance issues: rented e-vehicles; hired, borrowed, or non-owned vehicles (focusing on automobiles and trucks); and short-term housing rentals. (Part one of three.)

By Peter Georgiton, Christopher Meeks, Arden Levy, and Kristin Davis

The future is here, and it involves the for-profit sharing of vehicles, real estate, automobiles, clothing, and other items of value. While Baby Yoda is not likely to join us any time soon, these changes are evident all around us.

The sharing economy is evident in a multitude of spaces. For example, the urban landscape around us already looks different, with sidewalks, bike lanes, and streets filled with e-scooters, Segways, and e-bikes—part of the e-transportation revolution—and docking stations for these new modes of transportation make these e-vehicles accessible to renters. As a result, many users of e-transportation are not owners of the vehicles they are using to move around, which is a significant change from only a few years ago.

Shared economies have sprouted in other spaces as well. For example, the hotel and real estate industries are vastly changed, with Airbnb and shared office spaces changing how rooms, apartments, and offices are rented. Changes have affected traditional means for accessing vehicles on a temporarily basis, with a rise in automobiles that are hired, borrowed, or used by nonowners. Peer-to-peer rentals are becoming more common for individuals and businesses alike. These changes mean business opportunities for new types of transactions and new options for rental, while also resulting in business losses for traditional companies.

Of course, the constantly evolving sharing economy means that there are new potential liabilities, with new insurance needs and considerations arising all the time. For example, it was only in 2014 when the first states enacted legislation clarifying the insurance responsibilities for Uber and Lyft drivers using their own vehicles. The sharing economy has exploded even since then. Who pays when an e-scooter rider is involved in an accident and there are resulting medical costs? Who pays when a business rents out its vehicles for use?

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