Defining Carpooling in Insurance Terms
For insurance purposes, carpooling is when there is a steady and consistent or long-term arrangement to carry other passengers who aren’t from your household. If you are helping a friend get around for a week during a visit or driving someone to the airport on a single planned trip, that is not carpooling.
Casual Carpooling: No Carpool Insurance Needed
Agreeing with other parents in your local area to take turns driving the kids to school is a form of casual carpooling in which you are essentially just taking on a few more passengers. In this case, your liability auto insurance should cover you completely at a certain dollar amount per passenger. If carpooling happens more often, you may want to increase that amount per passenger. But ultimately, there’s no risk in a lapse of coverage.
Carpooling for Compensation: Carpool Insurance Needed
When any kind of money changes hands in exchange for a service (in this case, a ride), your auto insurance policy no longer covers the liability of those carpooling passengers. This is because accepting money changes the definition of what you’re doing to a business transaction, even if you’re only accepting money to pay for gas.
If you carpool other children for any kind of compensation, inform your insurance provider so that they can make an adjustment to your policy. Adding carpool insurance may not alter your policy premium by much and it can make a large difference in both peace of mind and future stress.
For more information on the auto insurance policies and carpool insurance from Higgins Insurance, call us today at 1-866-273-2911.