Make sure you’re protected before you share

Last week the Iowa Insurance Division joined nineteen other states that have issued cautionary statements about the potential risks of drivers not having personal auto coverage when engaged in activity conducted under apps like Uber and Lyft. These apps connect drivers with riders for a fee.

To be clear, the Iowa Insurance Division is not out to ruin these innovative programs. However, all parties, including the drivers and riders in these programs, need to know what their risks are, and know how to mitigate those risks by finding the proper insurance coverage.

The overwhelming majority of Iowa drivers are insured. Many also have umbrella liability protection on their cars and other property.

However, commercial use of a vehicle is almost always excluded from these types of coverage. That can mean that careful and thoughtful purchases of insurance protection are negated, and the risks of accidents are borne by the app users. The transportation company may have an insurance program and coverage for drivers using the application and their car for commercial use, but the driver needs to understand how that coverage works and any limits that coverage may have. The goal of the Division is to inform people and educate Iowans on the importance of making sure they are adequately insured when driving for a ride-sharing transportation service.

This was highlighted recently in California, when a driver, contracted under one of these programs, was racing to pick up a fare and hit a family, injuring two family members and killing a six-year-old girl. Not only was the driver liable for damages, but the liability extended to the app user who had ordered the ride, even though that person was not in the vehicle when the accident happened.

The Iowa Insurance Division's concern is to make sure no one goes into a car-share or ride-share app arrangement uninformed or unprepared.

The IID offers five tips for Iowans who may plan to sign up for car-sharing or ride-sharing arrangements:

' Review carefully any type of agreement involving car-sharing or ride-sharing. If you are driving for one of these services they may have commercial coverage that adequately covers you in the event of an accident. However, please review any coverage offered by the transportation company.

' Before you decide to rely on insurance that is provided by others, be sure to get a copy of the policy and ask an insurance professional to make certain it covers all of your exposures.

' If using such a service, evaluate who may be responsible if you are injured and whether coverage will be available.

' Talk to your insurance company or agent to see what is and isn't covered. The exclusions in your personal automobile policy or umbrella liability policy for this type of use will likely apply to all types of coverage, including coverage for liability to third people, uninsured and underinsured motorist coverage, coverage for medical payments for people using or occupying your vehicle, comprehensive physical damage coverage, collision physical damage coverage, and coverage limits on the insurance company's duty to defend you in a lawsuit.

' If the car-sharing or ride-sharing service provides some type of 'umbrella” insurance, find out if that coverage includes the duty to defend you in a lawsuit.

Insurance coverage for homes rented out under home-sharing apps such as VRBO and Airbnb also need to be checked. The best bet is to make sure your agent knows what your plan is and to ask him or her to get you the proper coverage.

' Nick Gerhart is Insurance Commissioner of the State of Iowa. Comments: www.iid.state.ia.us/contact