Will my car insurance cover car pooling?
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UPDATED: Mar 13, 2020
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Car pooling is a way to reduce the costs of transportation to and from work, school and other destinations. When you car pool, you travel with a group of people in a single vehicle rather than each person driving their own individual car. Because only one car is used at its full capacity, there are fewer cars on the road at any given time. This reduces the overall impact of emissions, reduces congestion in traffic and lower gas costs. Car poolers also may share the overall cost of gas, making this a very affordable and eco-friendly option.
Before beginning a car pooling program, however, it’s important to understand how your insurance will handle the new risks associated with car pooling. In most cases, an insurance company will not have any problem with it, but you may need to change your coverage to accommodate your new needs.
Does Private Car Insurance Cover Car Pooling?
Most auto insurance companies have an exclusion against vehicles being used as taxis or other transportation services for money. In order to use your vehicle as a paid taxi service, you would need to obtain commercial auto insurance. Because car pooling is not a for-profit venture, however, a commercial policy is unnecessary. As long as you are driving for free or the cost of gas, you can continue to carry a personal auto policy on the vehicle.
If other people drive the vehicle during the car pool, the insurance should cover this as well. Be sure that your policy does not exclude unlisted drivers. As long as the insurance will cover all permissive-use drivers, you can allow anyone you wish to drive your vehicle as part of a car pool program. If not, you will need to be the only person who drives your particular auto.
Special Concerns When Insuring a Car Pool Vehicle
Just because your car pooling is not a commercial venture does not mean that your basic insurance policy will be sufficient. Carrying multiple unrelated passengers poses a higher liability risk than driving only yourself or your own family. If you are involved in an auto accident while car pooling, you may be responsible for paying for injuries to all of your passengers as well as anyone you may hit. This can quickly lead to very expensive lawsuits if you do not have sufficient coverage.
If you are carrying only the state-mandated amount of bodily injury liability coverage, consider raising it to a higher limit. This will help to reduce the impact of any serious accidents you may cause and can help cover the medical expenses of all of your passengers. Be sure to talk with your insurance company to get suggestions for what coverage you may need to buy in order to protect all of your passengers.
Most basic policies will have bodily injury liability insurance of $100,000 per person up to $300,000 per accident. If you have only one or two passengers with you, this may be sufficient. If you drive a minivan or SUV and pack it to its maximum capacity, however, $300,000 will likely not cover the full cost of medical expenses for all of your passengers, especially if there are severe injuries or deaths resulting from an accident. See if you can increase your overall limits to $500,000 or even $1 million.
Also consider purchasing personal injury protection coverage for yourself if you do not already have it. This coverage not only protects you against injuries sustained in your own vehicle, it will also cover your medical expenses if you are injured while riding in another person’s auto. Since most car poolers rotate whose vehicle they will be commuting in, you may spend a lot of time as a passenger and carrying PIP coverage will help you to defray the possible costs of medical expenses after an accident. This is especially important because your fellow car poolers may not be carrying sufficient bodily injury liability insurance to cover your medical costs.
Car pooling is a great way to save money and reduce the environmental impact of commuting. By taking the time to review your coverage and adjust your policy accordingly, you can protect your assets from possible lawsuits and ensure that your vehicle has proper insurance.