Though car sharing may seem like a nice way to make some extra money, the insurance risks can well overshoot any extra cash you earn.

There are different kinds of car sharing programs; some are covered and others are not. Basically, if you receive payment of any sort for letting people take your car or drive them somewhere, your insurance policy may not cover your car or your passengers in an accident.

More than 500,000 people share nearly 8,000 vehicles through 27 programs in the U.S, according to University of California Berkeley researcher Susan Shaheen.

There are a few businesses which help connect car owners with drivers, like Relay Rides in San Francisco and Boston, Getaround in San Francisco and the Bay area, and Jolly Wheels, which does car sharing in New York, Arizona, Florida and several other states.

These programs are different from car sharing programs like Zip Car, which provide cars to people who need a temporary set of wheels. The peer-to-peer programs don't provide cars, they connect car owners with people who want to rent out the car.

But these peer-to-peer programs are not covered by standard insurance, says one expert.

"There is slight variation in language among policies issued by various insurers, but the intent is the same, to exclude the use of a personal auto for transporting people or property for income," said Loretta Worters, vice president of the Insurance Information Institute.

People who car pool or share rides are generally covered, she said. But be warned: "If you regularly receive compensation for giving a ride then it is not covered under a normal policy," she said.

How peer-to-peer works

Car renters like the idea of peer-to-peer renting because it's cheaper. For a membership fee, peer-to-peer participants get cars for about $15 to $30 a day.

In your insurance company's eyes, offering your car to strangers increases your risk, because they may not be good drivers. They may not be familiar with the roads or know how to drive well in your regions' weather. Plus, putting more miles on your car opens it up to more damage.

There are additional policies you can add, insurers say.

In the event a car-sharer is sued, a standard homeowner's or auto policy will provide some liability coverage, paying for judgments against you and your attorney's fees, up to a limit set in the policy. But that may not be enough.

"In our litigious society, you may want to have an extra layer of liability protection," Worters said.

For about $150 to $300 per year you can buy a $1 million personal umbrella liability policy. Umbrella policies cover anything not covered by other insurance policies.

The next million will cost about $75, and $50 for every million after that. Because the personal umbrella policy goes into effect after the underlying coverage is exhausted, there are certain limits that usually must be met in order to purchase this coverage.

An umbrella policy kicks into gear when a person reaches a limit on the underlying liability coverage in a homeowners, renters, condo or auto policy.

The policy provides a little more security in that morning commute when your co-workers are still waking up and accident-prone.

"Whether you should have an umbrella liability policy is more dependent on how much net worth you have to protect," said Dick Luedke, a spokesman for State Farm. "In these days of extreme medical costs, it doesn't take too long for the medical care of someone who's hurt to go to a rather astronomical level."

But caveat emptor: Before buying the umbrella policy, you'll have to have a significant back-up already in place. Most insurers will want you to have about $250,000 of liability insurance on your auto policy and $300,000 of liability insurance on your homeowners policy before selling you an umbrella liability policy for $1 million of additional coverage.

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