Only 10% of comprehensive car insurance policies specifically exclude lift-sharing
Around the globe a app based company called Uber is facing legal action and backlash from the licensed taxi and private hire trade for providing ‘ride-sharing’ services for profit. Even though Uber is facing a high profile court case in London by the Licensed Taxi Drivers Association, the UK has strict laws on ride-sharing.
In the UK it is against the law to provide any form of lift-sharing service for profit, even if no money changes hands. For example you could have run a country pub and every night offer to give a “free lift” home to your punters. As no money changes hands this might seem acceptable, but in a court it would be argued that you profited because the patrons may have not drank or eaten in your establishment without the “free lift home”.
The warning comes following a review of over 230 comprehensive car insurance policies by insurer GoCompare, which revealed that just under one in ten policies specifically exclude cover for lift-sharing. While the remainder provide cover for social car sharing, this may be subject to certain conditions such as your vehicle can’t carry more than eight passengers or that you cannot make a profit.
UK insurers stipulate that any driver offering lift-shares are only permitted to ask passengers for a contribution towards fuel and other running costs. The amount charged must not include an element of profit, otherwise insurers would consider that you are operating as a passenger service for hire and profit (also known as hire and reward).
Even though their are strict laws on lift-sharing in the UK, a quick search of the internet shows there are various websites offering to put together drivers and passengers. I have spoke to industry experts and it is clear theses types of services are not welcomed. At the end of the day you are being driven in a vehicle that is not checked and the driver could have a serious criminal record. Experts also told me that if you lift-shared with a work colleague, but you had a day off and specifically went out of your way to pick them up this would be classed as ‘hire and reward’.
With all insurance policies the small print can hide many exclusions which you may not even consider on a day-to-day basis. For example when travelling alone to work most insurers can include cover for commuting to a main work place but if drivers are going to company sites other than their usual workplace (for example, an occasional meeting or branch visit) then they should extend their cover to include business use. If they are not covered for business mileage then the insurer may refuse to pick-up the bill for any claims incurred on work-related journeys.
Gocompare.com’s motor insurance spokesman, Matt Oliver, commented: “The rising cost of motoring coupled with the current financial squeeze has made lift-sharing an attractive proposition for many drivers. And, the growing number of dedicated car-sharing websites are making offering and finding lifts easier than ever.
Oliver continued: “But, before signing-up to offer a lift, we strongly recommend you speak to your insurer to make sure that you are covered for both lift-shares and the journeys you intend to undertake, otherwise you may accidentally invalidate your cover.