Car insurance agreements may be axed and motorists may be left without cover if passengers have been charged for journeys. Experts at CarParrts4Less says earning an income from giving lofts may certify a driver as a “taxi hire service”.
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Road users cannot become a taxi service unless they have the correct local authentication and if caught, drivers could receive penalties.
However, even charging friends and family members over a long period of time could be considered enough to trigger insurance firms to end an agreement.
CarParts4Less warns drivers they must always read the terms and conditions of a policy to ensure cover is not accidentally broken.
They also warn drivers to keep policyholders up to date with any change in their circumstances which could affect their current agreement.
A spokesperson for the firm said: “Some policies specifically exclude cover for car sharing, whether you make a profit or not.
“For those whose policies do allow lift sharing, it may be void if you charge people for journeys – many state that you may only make enough to cover petrol and driving costs.
“Earning money from giving lifts can identify you as a ‘taxi hire service’, voiding many policies.
“It’s important to always read the terms and conditions of your car insurance policy, to ensure that you have not accidentally invalidated it.
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“Keep your insurance provider up to date with any change of circumstances, regardless of whether you think it’s relevant, as some seemingly unrelated life changes can impact your premium.”
Alongside invalidating your cover, moots could also face strict financial penalties for offering their vehicle to drop off passengers.
Anyone caught turning a profit will be issued a fixed penalty notice from police officers and could be prosecuted in some severe cases.
This can lead to fines of £2,500 and drivers could be blacklisted from many traditional insurance firms in a massive blow.
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This will make it increasingly difficult to secure future cover at a good price meaning drivers will be affected in the long run.
Rachel Wait, spokesperson from MoneySuperMarket has previously warned drivers to read details on a policy to make sure they do not accidentally invalidate cover.
Although some drivers may be allowed to “take the odd pound”, the police and insurers would look harshly if drivers were making a consistent profit.
She said: “What may be seen as fairly innocent, such as charging somebody for a lift, may actually encroach on the terms of their insurance.
“Taking the odd pound here or there to help cover petrol costs or general car maintenance is usually fine.
“But if you’re found to be making a profit from giving someone a lift your policy could be invalid.
“Always check with your insurer if you’re not sure. It’s also a good idea to check your cover will still be valid if you’re thinking of joining a lift sharing scheme.”
A simple way drivers can break the law and invalidate their cover is to get involved with online lift sharing groups.
These pages allow users to advertise their own taxi services where motorists will charge to take passengers wherever they like for a fee.
Usually the fees are less than it would have cost to take a licenced taxi which has made them popular among young people.
An investigation by the BBC found up to 7,000 members in a local lift sharing group in Bournemouth.
Reacting to the findings, Dorset Police warned passengers risked their “own personal safety” by using the service.
A statement said: “When getting into a vehicle with an unlicensed and unvetted stranger, you have no knowledge of their background and risk your own personal safety.
“Please consider an alternative journey home, either by contacting a trusted friend or relative, catching a bus or using a licensed taxi.
“Before offering a lift in exchange for money, you should speak to your insurance company as this could invalidate your insurance and may result in your vehicle being seized by police, a fixed penalty or prosecution resulting in a fine, points on your licence or disqualification from driving.”
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