Financial Security

Navigating the Sharing Economy

Written by NAIC | 7/10/23 2:00 PM

The sharing economy is rapidly gaining popularity. PricewaterhouseCoopers (PwC) expects it to hit $335 billion in global revenue by 2025. Before you jump in on peer-to-peer transactions, understand how they work and how to avoid financial pitfalls.

Types of Sharing

Rideshare

Ride-sharing companies such as Uber and Lyft connect individual drivers with people who need rides. Passengers and drivers can screen each other, schedule rides, and collect payments electronically.

Homeshare

Home-sharing or peer-to-peer rentals are sites where people rent out rooms or entire homes to guests for extra income. Guests find a property online and pay for the stay like a hotel. The difference is that the property is often a privately owned apartment, condo, or house. Anyone can register as a host or guest.

  • Does my homeowners' policy cover guest injury and property damage?
    Many homeowners' policies won’t cover guest injuries or property damage. Talk to the home-sharing company and your own agent to determine if you need additional liability coverage or special landlord insurance.
  • Can I give guests a list of house rules?
    Set boundaries. Let guests know what items they can and can't use. It's not uncommon for a host to lock certain rooms that are used for storage, etc. Don't be afraid to charge them for damages.
  • What if I don't feel comfortable with the person renting?
    Trust your gut. You always have the option to turn down potential guests.

Goods & Services 

A smaller segment of the sharing economy involves the lending of personal items for a fee. Lenders and borrowers advertise and rent items like power tools, golf clubs, or designer dresses online. Or, someone seeks help from another individual online to help with tasks like packing boxes or housecleaning.

Ask Your Agent

  • If paying guests cause damage when renting, will my policy cover property damage?
  • What kind of insurance coverage do I need before driving for a ridesharing service?
  • What if I’m injured in an auto accident while a passenger in a ridesharing vehicle?
  • How is my property covered if I hire someone to help with moving, house cleaning, or handy work?
  • What if the person who rents my personal items loses or damages those items?

This article is provided by the National Association of Insurance Commissioners (NAIC). Find a licensed financial advisor using our one-of-a-kind Find An Advisor tool.
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