Your Clients Are Sharing Everything: What Risks Should You Consider?

This article is part of a sponsored series by Academy Journal.

Uber made its debut in 2010 in San Francisco, starting with just a handful of cars. Fast forward to the fourth quarter of 2024, and the company paid its drivers a staggering $20 billion. Similarly, Airbnb, which began in 2007 when two hosts welcomed three guests into their home, saw hosts earn over $57 billion in 2023. Today, your clients are not just living in their homes or commuting to work; they are actively participating in the sharing economy, utilizing their cars, trucks, homes, pools, RVs, and even their time.

In an era where financial pressures are mounting, sharing apps offer a glimmer of hope for extra income while maximizing the utility of existing assets. As the sharing market has matured, the focus has shifted from whether someone is listing a room online to what they can’t share.

Unfortunately, many clients may not think to mention their sharing activities unless their insurance agent specifically inquires about them.

Monetizing Everything

Consider the mindset of clients renting out part of their home. They own the property, and if a room is sitting unused, why not earn some extra cash? They might think, “I’ve been paying for homeowners insurance for years without a claim; it must be covered.” This line of thinking can extend to other assets as well.

“I’m already out running errands; I might as well log into Uber Eats and make a few deliveries.”

“I finish work at five. I can grab a quick dinner and then head to the airport for a few hours of rides.”

“I only use my travel trailer a couple of weekends a month. I can list it online and let someone else enjoy it while helping me cover the payments.”

The challenge lies in helping clients understand that sharing their assets isn’t merely about making a few extra dollars. Insurance companies view these activities differently. A quick review of any client’s policies—be it HO-3, HO-4, HO-6, Personal Auto, or Recreational Vehicles—will reveal how these exposures are treated.

Excluded, Limited, or Troublesome Exposures

What clients are doing matters. They are altering the risk profile of their lives, which can significantly impact how insurance companies assess their coverage. For instance, a spare room or a pool house that was once used for family gatherings is now being rented out like a hotel. This shift in usage can change the risk landscape entirely.

Consider a client with a rarely used car, perhaps a late-model Corvette. They might think, “My agent said anyone who drives my car with permission is covered, so renting it out should be fine.” This same client may also decide to rent their RV on platforms like Airbnb or Outdoorsy, believing that insurance will cover any accidents that occur while someone else is using it.

Moreover, clients may not realize the implications of picking up laundry for others through services like Poplin. They might not consider that they are responsible for someone else’s property while it’s in their possession.

At this point, it’s crucial to review policies to identify exclusions, limitations, and other potential issues. Remember to read the full policy. Understanding your clients’ activities and how they may affect their coverage is essential.

Good Conversations Make Better Clients

Never assume you know everything about your clients, even if they’ve been with you for years. Life changes, and those changes may not always be communicated to their insurance agent.

Start by asking questions. Inquire about the apps they use, how frequently they use them, and whether they have additional dwelling units or other properties listed online. For example, if they recently installed a pool, ask if they’re renting it out. These conversations are vital for uncovering potential risks.

Document every conversation in their file. This not only helps clients remember what was discussed but also protects you in case of a claim denial or policy rescission due to material misrepresentation. Having a checklist of common questions can streamline this process.

Ultimately, whether or not your clients currently have sharing exposures, it’s essential to engage in these conversations. Understanding coverage gaps and documenting everything could be one of the best things you do for your clients and your business.

This article is part of a sponsored series by Academy Journal.

Uber made its debut in 2010 in San Francisco, starting with just a handful of cars. Fast forward to the fourth quarter of 2024, and the company paid its drivers a staggering $20 billion. Similarly, Airbnb, which began in 2007 when two hosts welcomed three guests into their home, saw hosts earn over $57 billion in 2023. Today, your clients are not just living in their homes or commuting to work; they are actively participating in the sharing economy, utilizing their cars, trucks, homes, pools, RVs, and even their time.

In an era where financial pressures are mounting, sharing apps offer a glimmer of hope for extra income while maximizing the utility of existing assets. As the sharing market has matured, the focus has shifted from whether someone is listing a room online to what they can’t share.

Unfortunately, many clients may not think to mention their sharing activities unless their insurance agent specifically inquires about them.

Monetizing Everything

Consider the mindset of clients renting out part of their home. They own the property, and if a room is sitting unused, why not earn some extra cash? They might think, “I’ve been paying for homeowners insurance for years without a claim; it must be covered.” This line of thinking can extend to other assets as well.

“I’m already out running errands; I might as well log into Uber Eats and make a few deliveries.”

“I finish work at five. I can grab a quick dinner and then head to the airport for a few hours of rides.”

“I only use my travel trailer a couple of weekends a month. I can list it online and let someone else enjoy it while helping me cover the payments.”

The challenge lies in helping clients understand that sharing their assets isn’t merely about making a few extra dollars. Insurance companies view these activities differently. A quick review of any client’s policies—be it HO-3, HO-4, HO-6, Personal Auto, or Recreational Vehicles—will reveal how these exposures are treated.

Excluded, Limited, or Troublesome Exposures

What clients are doing matters. They are altering the risk profile of their lives, which can significantly impact how insurance companies assess their coverage. For instance, a spare room or a pool house that was once used for family gatherings is now being rented out like a hotel. This shift in usage can change the risk landscape entirely.

Consider a client with a rarely used car, perhaps a late-model Corvette. They might think, “My agent said anyone who drives my car with permission is covered, so renting it out should be fine.” This same client may also decide to rent their RV on platforms like Airbnb or Outdoorsy, believing that insurance will cover any accidents that occur while someone else is using it.

Moreover, clients may not realize the implications of picking up laundry for others through services like Poplin. They might not consider that they are responsible for someone else’s property while it’s in their possession.

At this point, it’s crucial to review policies to identify exclusions, limitations, and other potential issues. Remember to read the full policy. Understanding your clients’ activities and how they may affect their coverage is essential.

Good Conversations Make Better Clients

Never assume you know everything about your clients, even if they’ve been with you for years. Life changes, and those changes may not always be communicated to their insurance agent.

Start by asking questions. Inquire about the apps they use, how frequently they use them, and whether they have additional dwelling units or other properties listed online. For example, if they recently installed a pool, ask if they’re renting it out. These conversations are vital for uncovering potential risks.

Document every conversation in their file. This not only helps clients remember what was discussed but also protects you in case of a claim denial or policy rescission due to material misrepresentation. Having a checklist of common questions can streamline this process.

Ultimately, whether or not your clients currently have sharing exposures, it’s essential to engage in these conversations. Understanding coverage gaps and documenting everything could be one of the best things you do for your clients and your business.