Insurance & The Sharing Economy

As the sharing economy continues to expand, it’s transforming the way people travel, earn income, and use personal property. Today, it’s easier than ever to book a short-term rental, grab a ride through a mobile app, or even rent out your car to a stranger—all with just a few clicks.

In fact, the global sharing economy is projected to exceed $344 billion in 2025, driven by widespread adoption of peer-to-peer services like Airbnb, Uber, and Turo. With a projected compound annual growth rate (CAGR) of more than 30%, this sector is expected to surpass $1.1 trillion in new market value by 2029.

But while platforms like these have opened doors for extra income and convenience, they’ve also introduced new questions—and potential gaps—when it comes to insurance coverage.

Here’s what you need to know before listing your home, vehicle, or tools for rent online.

What Is the Sharing Economy?

At its core, the sharing economy is a system that allows individuals to rent or share access to assets—such as vehicles, homes, or services—often through a digital platform. Popular examples include:

While these services provide flexibility and earning potential, the nature of peer-to-peer transactions often blurs the line between personal and commercial use—raising unique insurance considerations.

One Real-World Scenario: Peer-to-Peer Car Sharing

Consider this common example:

A policyholder is thinking about buying a new electric vehicle and renting it out through a peer-to-peer platform like Turo. These platforms allow car owners to make their vehicle available to others for short-term rentals—much like an Airbnb for cars.

From a business standpoint, it’s an appealing opportunity. But from an insurance standpoint, it’s more complex.

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While Turo provides a platform-backed insurance policy for its users, these policies typically cover the rental transaction itself—not the vehicle owner’s full range of personal liability or the vehicle’s use outside of Turo. And because the car is being used for commercial gain, most personal auto policies won’t extend coverage to this type of activity.

Even among national carriers and specialty insurers, coverage for peer-to-peer car sharing remains limited. Some insurers have begun developing endorsements for home-sharing, but the car-sharing space is still evolving—and many companies are not yet offering individual coverage solutions for these risks.

Is Traditional Insurance Enough?

Many personal insurance policies are not designed to account for the risks that come with commercial or shared use. Here’s why that matters:

• Risk profile differences: When you rent out your vehicle or home, you’re allowing someone else—often a stranger—to use it. This changes the risk exposure significantly.
• Limited underwriting visibility: Platforms like Turo may vet renters using license verification, insurance scores, and other tools—but this information typically isn’t shared with the asset owner or their insurer.
• Potential coverage exclusions: Damage or liability that occurs while the asset is being used for commercial purposes may not be covered by a standard personal policy.

Even if the platform offers insurance, it’s important to understand the limits, exclusions, and responsibilities of that coverage. For example, you may be responsible for a deductible or excluded from coverage for wear and tear.

What Should You Do Before Participating?

If you’re considering joining the sharing economy—by renting out your home, car, or other personal assets—take these steps first:

1. Talk to your independent insurance agent.

   Not all policies are created equal, and your agent can help you understand what is—and isn’t—covered under your existing policies. They may also be able to recommend endorsements or specialty products if they’re available.

2. Review platform-provided insurance carefully.

   Understand the terms, limitations, and deductibles involved. Is the coverage primary or secondary? What happens if damage occurs outside of a booked period?

3. Evaluate the risks vs. rewards.

   While earning extra income is appealing, it’s important to ensure your financial well-being is protected in the event of a claim. In some cases, the profit may not outweigh the exposure if proper insurance coverage isn’t in place.

The Central Difference

At Central, we stay ahead of emerging trends so we can better support our policyholders—no matter how technology evolves. While we continue to monitor developments in the sharing economy, our focus remains on helping individuals and families understand their risks and find coverage solutions that fit their unique needs.

If you’re considering participating in a peer-to-peer platform or using your assets for commercial purposes, your best first step is to reach out to your Central agent. They can walk you through your current policy, help identify any potential gaps, and ensure you have the right protection in place—before you hand over the keys.