Companies like Airbnb and Turo (a car-sharing platform) are often more affordable and flexible than traditional hotels or car rental services. But using them can also expose you to liability risks if something goes wrong. It might be tempting to assume that you receive the same rights as a consumerBut this is not the case.
When you hire a car through a traditional hire company you are entering into a contract as a consumer and are protected by UK law Consumer Rights Act 2015. This guarantees that you will receive a safe product or service suitable for your needs, as well as certain reimbursement rights.
But on sharing platforms, you contract directly with another consumer to supply and consume goods and services between you. The sharing company simply provides an online platform to facilitate your contract. Its obligations to you are limited to providing this service – provide its website and process your data (in accordance with its privacy policy and GDPR rules).
Your rights and obligations on these platforms are therefore not covered by consumer protection regulations. Neither party is covered by the Consumer Rights Act, which only applies to contracts between businesses and consumers.
This article is part of Quarter Life, a series about issues affecting those of us in our 20s and 30s. From the challenges of starting a career and taking care of our mental health, to the excitement of starting a family, adopting a pet or simply making friends as adults. The articles in this series explore questions and provide answers as we navigate this turbulent time in life.
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This means that if you suffer an injury while using someone else’s property or driving their car, the platform company is not legally obligated to compensate you. Your contract is with the other user (who rents their house or car to you), and they have the legal obligation to compensate you for your injury or loss.
Similarly, if you list your property on a sharing platform, you expose yourself to personal liability vis-à-vis any person injured when using your property. The same applies to property damage. As a guest, you are personally liable for damages you cause to your host’s property, and as a host, you can only claim damages from your guests, not the sharing platform.
Take risks
Major platforms like Airbnb offer dispute resolution centers, which coordinates these claims. This can reduce the stress and hassle of having to go through court yourself. But even so, the chances of getting full recovery from your loss are uncertain, especially if the loss is significant.
Standard insurance is also unlikely to help. Most personal insurance policies do not allow you to use insured property for business purposes and will invalidate your policy if you are caught doing so without your insurer’s permission. The same applies if you assume that you are insured for the use of another’s property.
For vehicles, it is illegal in uk drive without the driver having liability insurance. Most likely, the other party will not have commercial vehicle insurance in place to cover your driving, so you run the risk of driving illegally.
Turo requires hosts to maintain a valid vehicle insurance policy always in accordance with UK law. Guest drivers are not required to carry their own insurance. Instead, they choose one of Turo’s protection plans. These plans cover vehicle damage and liability claims, with policies from a company authorized and regulated by the Financial Conduct Authority, Turo told The Conversation.
Most major platforms will require liability insurance. But be careful of the amount of the deductible, which can be much higher than your personal car insurance, and may lead to additional costs for handling claims.
For homes, you may be violating a covenant in your mortgage or lease if you sublet on Airbnb. In the recent British case of Bermondsey Exchange Freeholders Ltd v Ninos Koumettoa court ruled that the Airbnb host tenant breached the terms of its lease by subletting it.
Many platforms offer some sort of protection through their platforms, such as Airbnb Air Cover for hosts and guests. But they are not the same as insurance policies, and not always cover everything. Airbnb host damage protection only covers losses not covered by another party, such as your home insurer or the responsible guest. This means contacting your insurer and possibly getting them to invalidate your insurance policy if you shared without the insurer’s consent.
In a statement, Turo told The Conversation, “Turo has made trust and security the foundation of our platform and our protections have always worked as intended. Airbnb chose not to comment on the post.
To protect yourself
Currently, sharing platforms are largely untreated by law and there is little regulators can do about their practices. But if you understand the risks you are taking, you can protect yourself from unpleasant surprises.
1. Know your policies
If your insurance specifically prohibits commercial activities, contact your insurer to clarify or switch to another insurer with sharing-friendly policies. This is especially important if you regularly use sharing platforms, as you risk both personal liability to your guest and the loss of your coverage for your property.
2. Consider taking out additional insurance
Look for a policy that covers you specifically for these activities. This will protect you if you are injured and the other party cannot compensate you. If you cause damage to someone else’s property, you can rely on insurance instead of being personally liable.
3. Read the terms and conditions
While browsing through pages of legalese can be unappealing, it’s important to know where you stand with these companies. It can be as quick as reading the FAQs on their websites or researching the disclaimers and disclaimers before clicking “accept”. Platforms such as Airbnb offer advice on the laws and regulations for using their services.
This article is republished from The conversation under Creative Commons license. Read it original article.
Sally Shinan Zhu received funding from the Leverhulme Trust in 2018-2021.
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