Insurance as an Accelerator in the Evolution of the Sharing Economy

This piece is by Aaron Ammar,Co-Founder at Roamly – see bio below.

The advent of the sharing economy  has undeniably transformed our lives, opening up unprecedented avenues for commerce, connection, and convenience across diverse sectors, from urban mobility to unique accommodations and adventurous travel. However, this profound shift, while offering immense opportunity, has simultaneously introduced a complex challenge for the insurance industry: how to adequately protect the myriad of assets that underpin these dynamic new models. 

For too long, insurance has been mistakenly perceived as a barrier—a bureaucratic hurdle that complicates operations, limits growth, and slows the evolution of the sharing and on-demand economy. This perception, however, is not only outdated but fundamentally flawed. With the right strategic approach and technological integration, insurance can, and indeed must, transform from an impediment into a powerful catalyst for expansion and opportunity.

The root of this traditional challenge lies in the inherent dual nature of shared assets and the intricate web of needs within marketplaces involving multiple buyers, sellers, and renters. A car is personal property one moment, a rideshare vehicle the next. An RV is a family vacation home, then a rental unit for another family’s adventure. This constant toggling between personal and commercial use creates a significant chasm in conventional insurance coverage.

The Inadequacies of Traditional Coverage

Consider the specific example of rideshare and delivery drivers, a cornerstone of the modern on-demand economy. For these participants, typical commercial auto coverage is often inadequate, if available at all. More commonly, drivers rely on their personal auto insurance policies, which almost universally include clauses that explicitly exclude coverage for “business use” of vehicles. This leaves a gaping void in protection for drivers when they are actively using their cars for rideshare or delivery services. 

While rideshare companies offer limited liability coverage, this usually applies only during active periods, specifically after a driver has accepted a request and is en route or has a passenger. This can be insufficient to cover accidents or injuries, especially if a vehicle is rented to drive for rideshare and the app is on “app on” and the driver is available but waiting for a request. Specialized rideshare endorsements or entirely new policies designed to bridge this gap are becoming available, but awareness remains low, and many drivers may forgo these essential protections due to perceived additional costs.

Similarly, liability protection for shared property or services often falls short. For homeowners or personal property owners leveraging platforms like Airbnb or Outdoorsy, standard policies typically do not extend coverage for damages or incidents when a property is rented out through on-demand platforms. The moment a private home becomes a temporary commercial lodging, its existing insurance may become null and void for any related incidents. Adding to this complexity, shared property platforms themselves may encounter difficulties in obtaining comprehensive insurance due to the nuanced concept of “insurable interest” in properties or goods being shared. This leaves both property owners and users vulnerable to significant financial exposure in the event of property damage, injuries to users, or other unforeseen liabilities.

Modern Insurance Coverage

This pervasive complexity, where physical products are maintained by their owners but then frequently rented or loaned to multiple, diverse parties, means that traditional insurance frameworks—designed for static ownership and singular use—simply fall short. This fundamental inadequacy has historically impeded the very growth and dynamic operation that marketplaces seek to foster. This is precisely the “sharing economy insurance gap” that Roamly has started to close with the introduction of new solutions like its Carshare offering, particularly around embedded insurance. 

Lloyd’s of London designated Roamly a Coverholder, validating the insurtech’s role as a trusted entity in the specialty insurance and making it an enabler for the future of shared mobility. From RVs and campervans to carshare and emerging transportation models like cybercabs, the sharing economy demands specialized, agile insurance that leverages data and AI for personalized coverage, and expanding benefits beyond traditional embedded insurance and other models. The Lloyd’s Coverholder appointment positions Roamly to introduce new offerings faster and with greater credibility to power the growth of the sharing and on-demand economy. 

The sharing economy  presents tremendous opportunities for entrepreneurship and economic growth, and the role of insurance within them can be equally transformative with the right kind of innovations that leverage the latest technologies. Through high quality innovation, insurance can evolve from being a hindrance to a force that defines the future of how we live, work, and travel.

Aaron Ammar, Roamly Co-Founder & Chief Insurance Officer. Roamly was awarded a Lloyd’s Coverholder designation for its superior expertise and experience in covering marketplaces in the sharing and on-demand economy created by the sharing, on-demand economies. Roamly’s underwriting framework and AI powered approach actuarially led approach and clear underwriting framework results in best-in-class insurance products, backed by the financial strength of the world’s largest insurers and reinsurers.