Tips for navigating the sharing economy

(BPT) - Thousands of people stayed in rooms and houses last night that belong to strangers. More hopped into cars with people they'd never met and accepted a ride to a restaurant or to their home. A young woman rented a designer dress she saw listed online.

These are a few examples of the sharing economy - a system in which people rent homes, arrange rides and borrow personal items typically through online services that facilitate the transactions. Rather than doing business with hotel chains, taxis or department stores, consumers are engaging with strangers in a way that is atypical of traditional business interactions.

The sharing economy generated about $15 billion in revenue in 2013 and is expected to hit $335 billion by 2025, according to PricewaterhouseCoopers.

Like many big changes, the emergence of the sharing economy has required consumers and companies to re-educate themselves and rethink their approach. While there are many safeguards in place, owners and renters tend to overlook the role insurance plays in this new economy.

It doesn't have to be complicated. Resources such as Insure U from the National Association of Insurance Commissioners (NAIC) can help you avoid unexpected surprises in the world of shared rides and rooms. A few things to keep in mind:

Welcome home

The vast majority of accommodations booked on HomeAway, VRBO or Airbnb go off without a hitch. Still, there are stories involving families coming home to torn-up couches, smashed-in walls and homes littered with trash.

If you regularly rent out a room in your home, it's important to know many homeowners policies won't cover guests' injuries or property damages. Talk to your insurance agent and determine if you need additional liability or landlord coverage.

Likewise, if your next vacation involves renting a room or villa, make sure your homeowners or personal liability insurance covers any damages that could happen during your stay.

Don't be taken for a ride

If you have a car and don't mind driving, contracting as an Uber or Lyft driver may be a way to make extra money in your spare time and meet some colorful characters.

Before you start, make sure everything is safe for you and your passengers. With this in mind, insurance is one of the most important factors to understand.

The most popular ride-share companies offer contingent collision and comprehensive coverage when a driver accepts a ride request or has a passenger in the vehicle. However, drivers need to understand that while you can insure your vehicle for personal use or for commercial use, in some cases you cannot insure it for both.

More insurance companies are creating policies that cover drivers who use their vehicle for both commercial and personal use. Contact your insurance representative to find out if there are any gaps in your coverage to reduce your liability and ensure a safe experience.

Goods and services for hire

The sharing economy doesn't stop there. It's also now possible to make a little extra money by renting out your power tools, golf clubs, camera equipment and much more - including your time and labor.

Before you rent, get a security deposit and take plenty of photos to document the item's condition. Talk with your insurance agent to figure out what kind of information you need for your homeowners insurance policy to cover whatever it is you're renting out.

Just like the sharing economy is all about convenience, Insure U ( offers free tips and tools to help you get smart about insurance coverage in all situations.

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