It’s called the “gig economy.” You have a day job that pays the bills – or most of them. But you also have a side gig, or side hustle, that brings in a little extra money.
These side gigs can involve anything that brings in extra money. Using your car to provide rides for hire or make deliveries for a local pizza store or a service like Grubhub or UberEats. Providing childcare in your home. Using your tools to do construction, repair and other handyman jobs. Or turning a favorite hobby into an income producer by selling some of your creations.
There’s nothing wrong with any of that. I find it really cool that with the power of the internet and technology, anybody can make additional money to help make ends meet or to just add to your bottom line. But it can be risky – if you’re not properly insured.
Personal auto policies and renters and homeowner policies generally exclude coverage for income-generating activities, or greatly reduce the coverage available.
Let’s say you have tools in your garage that you use to earn extra money and you’re burglarized or your garage catches fire, your existing home or renters coverage will be greatly reduced (or will not apply at all) once the adjuster determines your tools are used to earn money, potentially leaving you with the bill to repurchase all your tools. I’ve seen limits on business property on a renters or home policy as low as $0 or as high as $5,000. In either case, it may not be enough coverage. With a simple phone call to your insurance agent, you normally add business use to your home policy, that will add coverage back to your policy.
More people than ever are using their cars to earn money. Whether it be through car rental programs like Turo or delivery services, you must be aware that if you cause an accident while using your car to earn money, your auto policy generally won’t cover the repairs to your car or the bodily injury that you may have caused. With the average cost of a car accident approaching six figures, this could potentially ruin your life.
Run a small business from your living room? your homeowner or renter’s policy generally won’t cover accidents or other losses if you provide childcare or perform other money-making activities in your home.
I don’t want to discourage you from earning extra cash on the side, I think the gig economy is a wonderful thing. But give us a call at 303-452-6662 so we can make sure you’re properly covered. Otherwise that extra cash could turn into a big expense.