App to hire out your car – check your insurance first

I heard on the radio this morning that there is a new iPhone app to allow you to hire out your own private car to earn extra money.

While the idea may sound fine at first glance it is important to remember that hiring out your car may invalidate your motor insurance. The insurance premium for rental cars is significantly higher than for private motor insurance with some insurers not being able to insure this type of risk at all. Not to tell the insurer would be regarded as a non-disclosure of a material fact, which may allow the insurer to void the contract of insurance.

You may well also need to advise the vehicle registration authority in your state or territory.

The harsh reality is that most people who rent or hire a vehicle do not treat it with the same care and attention as their own car and so the level of wear and tear, mechanical damage, etc is going to be much higher.

As I said, it may sound like a good idea at first glance but with a lot of these things all the issues have to be thought through before rushing in.

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