How Will Car Insurance Change as the Global Sharing Economy Grows?

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The COVID-19 pandemic has created a sink-or-swim environment for business across all sectors. Some spheres have been hit hard by it, while others have been forced to grow, allowing them to succeed in new areas.
The mobility sector has seen some of that success. Though business for airplanes and buses has suffered, transportation services within the global sharing economy have seen unprecedented growth. With the need for social distancing, people have turned to online platforms for convenience and safety. 
This has spurred growth for delivery companies and ridesharing services. However, according to Insurance Business, this growth could be at a standstill if car insurance companies don’t evolve their policies and offerings to include the gig workers that support these networks.
Man driving a car with a black interior
Rideshare driving and other gig work is becoming increasingly popular.

What is the global sharing economy?

The global sharing economy is a certain kind of business in which goods owned by one party in a network can be accessed by another party in the network. In more traditional business models, goods belong to a single party with sole ownership and control. 
This practice is also called collaborative consumption or peer-to-peer-based sharing. This system of sharing focuses on renting and borrowing goods, rather than buying them.
Reliance on online platforms has risen during the pandemic, and with that, the global sharing economy has gone increasingly digital. Online businesses offering specific products have been able to grow and offer more as demand for online goods has increased.

How has the mobility sector outpaced car insurance?

The global sharing economy and mobility sector’s growth has been substantial over the last year, but its quick development has left gaps in insurance that need to be resolved. People are now having nearly everything delivered to their door, and with that, gig workers like independent delivery drivers are in demand.
The pandemic caused a massive shift toward online shopping. It also caused a move away from taxis and buses and toward more regularly sanitized transportation options like rideshare services for people who don’t own cars. 
With that shift, the demand for and dependence on gig workers—people who work on-demand, usually within temporary positions—rose.
However, car insurance for such impermanent, flexible roles is a bit of a gray area, one that now needs clarity. This disconnect means that workers would receive little support from their insurance companies when they’re injured on the job. This affects not only workers but the companies they work for and the people using their service as well.
The car insurance world is also leveraging technology like telematics to track driver behavior, and businesses outside of insurance, specifically original equipment manufacturers (OEMs), are creating their own car insurance policies. 
Some OEMs now offer auto liability and motor insurance coverage, which could offer a simple enough layout to help gig workers. If insurance companies don’t evolve to cover this gap, they may become less and less vital within the mobility sector.

How does insurance need to expand its coverage?

The increasingly digital world of insurance could help car insurance companies adapt quickly, allowing them to provide “real-time, on-demand service,” according to Insurance Business. This would help them better assist gig workers, as their insurance could work as they do.
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