How car-sharing could affect your insurance policy

Many motorists who regularly allow passengers to join them on their commute to work are falling foul of exclusions in the small print of their insurance.

The passenger will often pay a small amount towards the cost of the journey, which is where the policy becomes invalidated.

A significant minority of insurance policies do not cover this, and some will tear up a policy or refuse to pay out after an accident.

There are policies that do cover car-shares, however, an insurer would be able to refuse to pay out if it discovers that the driver is demanding more money to be paid by the passenger than the actual cost of the journey.

If this is the case, then the driver would in effect be classed as using their vehicle as a taxi, which is not covered by one in ten motor insurance policies, according to comparison site GoCompare. These policies do not cover drivers who are signed up to lift-sharing arrangements.

Drivers often car share in an attempt to cut down the amount of exhaust emissions affecting the environment, with less cars on the road as a result.

It could be ruled that the driver should have taken out a business insurance policy instead of the typical motor cover if they intend to car-share with work colleagues.

There are a number of exclusions that catch out motorists with car cover policies, so always make sure to read the small print and ensure that those included will not affect you.

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For more information and advice on how to  handle car insurance follow the MotorPocket blog and keep up to date with our insurance tips.