There are potential insurance issues which would affect an injured person’s recovery in an accident involving a so-called “sharing” service, such as Airbnb and Uber. We can foresee situations where an injured person may be without a recovery.
If you are using one of these services, be aware of the risks.
With Airbnb, you book a room within a private person’s home for either a short or extended stay. It is similar to booking a hotel room but less expensive. The problem that we foresee is whether the host has insurance.
Consider these problems:
- You book a room in the host’s apartment at 70 West End Avenue. You trip and fall on a torn carpet, and you fracture your wrist. The host does not have insurance. The host rents his apartment and has no assets. Therefore, you may have no recovery.
- Assume the prior fact pattern. The host does carry insurance, but he carries only $100,000 in liability. It may not be enough depending on the severity of your injuries.
- Again assume the same facts. The host has insurance, but his insurer denies based on the policy exclusion for commercial activities. The host purchased renter’s insurance which contemplated covering the host using the apartment solely as a residence. The insurer did not intend to cover a bed and breakfast business. Therefore, there may be a coverage denial because the host used the apartment for commercial purposes.
A further thing to consider is that the room that you rent, as well as the apartment, has not been inspected and passed by the Fire Department as it would for a regular hotel room regarding fire exits, smoke alarms, non-flammable material, etc. You may be sleeping in a fire trap.
UBER AND OTHER RIDE SHARES
Although Uber agreed that its cars working in the five boroughs would be licensed by New York City’s Taxi and Limousine Commission (“TLC”), there are still issues.
TLC licensed vehicles, such as yellow cabs and black car services must carry the following insurance: $200,000 for no fault or personal injury protection; and $100,000/300,000 for bodily injury. These insurance minimums are higher than those required of regular, private vehicles. E.g., $50,000 for no fault and $25,000/50,000 for bodily injury. The TLC insurance requirements are one of the most important protections for the general public.
We see the following insurance problems with Uber:
- How will Uber make sure that its drivers working in the five boroughs are licensed by the TLC and have not ventured into the City from neighboring counties (such as Nassau and Westchester) or states (New Jersey and Connecticut)? These vehicles may have lesser insurance than required by the TLC.
- Does Uber ensure that its drivers carry commercial policies? In the situation where an Uber driver only carries personal insurance rather than livery insurance, his insurance carrier may refuse to cover the accident. Or the injured passenger may only get the lower insurance coverage rather than the enhanced coverage required of TLC vehicles.
- What kind of driver screening does Uber make? In India a driver raped a passenger, and this resulted in the suspension of Uber’s service.
- What happens when another ride share company enters the market where its drivers do not agree to be bound by the TLC insurance rules?
We foresee cases where the injured party will seek to hold either Airbnb or Uber liable for an accident. This could happen where there is either no coverage or inadequate insurance. It is likely that either Airbnb or Uber will escape liability on the ground that they merely book the job and collect the money. The parent companies will claim that liability falls on either the apartment host or the vehicle owner.
We foresee insurance and liability issues with Airbnb and Uber. Proceed with caution.