Does Personal Auto Insurance Cover Carpooling?

Often colleagues, neighbors, college friends and parents share cars because they don’t see why two or three of them should travel in the same direction when one would do. It is an economic and environmentally friendly method of dealing with private transportation needs. That is why many large cities push for it with designated car pool lanes which allow faster travel most of the time.

Usually, standard personal car insurance policies would cover carpooling. However, it is best that motorists check their policies to make sure their use doesn’t cause any problem and they have sufficient coverage to deal with any unfortunate accidents. So, here are a few points to consider and make arrangements if necessary.

Stay within the Definition

With so many ridesharing programs and apps, it is important to make sure you don’t cross the boundaries. They are fundamentally different. Car-pooling is a social arrangement made purely for its convenience and economies between people who are traveling in the same direction.

On the other hand, ridesharing services are offered to take people from wherever they want to wherever they like to go for commercial gains, which usually requires a different policy. The same applies to carsharing where you allow someone else (often total stranger) to take your car wherever they want and it isn’t within the scope of personal automobile insurance policies as they pay for this privilege.

However, it is normally acceptable that car poolers contribute towards the costs like gas, maintenance, wear and tear. But it should be limited to that, rather than the vehicle owner (or any app) quoting a fee to allow people to join the journey.

Check Who Can Drive the Car

At times, people may want to share driving as well, especially if it is a long journey. In such cases, you should make sure that your auto insurance policy doesn’t have any limitations or exclude unlisted drivers. Standard policies usually offer provisions for drivers who are permitted by the owner (permissive user).

Also, if it is a frequently occurring arrangement you may want to consider adding the other person onto your policy as a listed driver. For example, if you regularly commute together with your co-worker and they share driving, you may want to add them onto your policy. This may not be necessary if they drive only on rare occasions and you have coverage for permitted-drivers.

Do You Need to Increase Liability Coverage

If you got the hang of carpooling and enjoy doing it whenever you can, you may want to increase your car insurance liability coverage limits because you are liable to pay for injuries your passengers may suffer as well as other road users. So, the number of people who can claim on your policy increases and state minimums may not be anywhere near enough in such cases. This becomes extra important as the number of passengers increases.

You May Want to Buy More Coverage

Personal Injury Protection may be helpful, depending on your health insurance position. It protects you and your family against injuries when you are in your car and carpooling in someone else’s vehicle. This coverage pays for traffic accident-related medical bills, regardless of fault. Uninsured Motorist coverage can be an economical and handy addition as well.


Car pooling is a novel idea reducing the number of vehicles on the roads that helps with congestion. It is good for the environment as it reduces emission. And it can be good for the pockets when people share costs or alternate cars. There are various initiatives to encourage more people to do it, especially at local authority levels.

If you participate in such arrangements, just make sure that your insurance covers all aspects of it properly and sufficiently to avoid complications in case of claims. Pay extra attention when you participate in a peer-to-peer carpooling arrangement on any platform or website and make sure that it cannot be interpreted as a commercial arrangement in any way and it doesn’t offer any profits to anybody involved.

You don’t want to cross that thin line between carpooling and for profit rideshare concepts. The moment you or someone else starts determining a fee for the service and you go out of your way to service other people’s needs for that fee, you cannot call it car pool anymore and you need a rideshare insurance, which is completely different from a personal policy.