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Ride-booking Insurance Gaps Causing Confusion

Ride-booking is one of the great new ways consumers can take advantage of mobile technology. By downloading an app for a smartphone, drivers and those in need of a ride can connect with each other and, for a small fee, carpool to a destination. This offers many benefits for both the driver and the passenger. The car-owner can subsidize the cost of the automobile through paying customers, while the passengers do not need to worry about the hassles of ownership, including loan payments, insurance costs and maintenance fees.

In addition to benefits for both the driver and the passenger, ride-booking also provides other advantages, including reducing the number of vehicles on the road, the amount of average miles driven and the tons of greenhouse gas emitted, the Solutions Journals reported.

Who covers what

Despite the added benefits to drivers, passengers and the world at large, many people are having trouble navigating through the complex insurance rules regulating the industry. Some states have so-called "insurance gaps" wherein drivers are not covered when passengers are not in the car, while other states are slowly introducing legislation requiring insurance companies to provide coverage to all motorists regardless of whether they're sharing rides or not.

According to Insurance Journal, this lack of consistency across states is creating a patchwork of insurance laws, and many ride-booking drivers are unsure of what their state allows, what their insurance company covers and what their local municipalities require. While new insurance products are being created to fix these gaps in drivers' coverage, if you're thinking about jumping on the ride-booking bandwagon, be sure to check with your insurance company and your state laws so you understand what you need to do to ensure you have coverage while you're working.

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