A couple of months back, we talked about carsharing arrangements, in which car owners offer their vehicles to rental networks for use on a ride-by-ride basis. However, the main stumbling block to such a plan is auto insurance rules — car owners risk losing their coverage by renting out their vehicles.
However, a closely watched piece of legislation appears to be inching closer to clearing this hurdle in the state of California. The California assembly just passed a bill, with strong bi-partisan support, which clears Individuals to share their vehicles in carsharing fleets without risking their auto insurance. The measure is now before the state senate.
The first-in-the-nation legislation helps expand carsharing by ensuring that individuals who allow their cars to be used in vehicle-sharing pools do not risk losing their own automobile insurance coverage. Currently, receiving even a small amount of money for the use of one’s vehicle is treated by insurance companies as a commercial use of the vehicle, thereby invalidating the individual’s personal insurance coverage.
This bill makes clear that personal vehicle sharing does not constitute a commercial use of the vehicle. The bill also makes sure that the individual car owner is not held liable for losses that arise when the vehicle is used for personal vehicle sharing.
”Owning a car can be expensive and vehicle sharing programs are a great way to help connect people with cars when they need them,” said Assemblymember Dave Jones, originator of the bill. “The bill will help car owners shrink the cost of owing their vehicles, reduce the need for some people to buy cars, improving parking and traffic congestion, and help the environment.”
Car sharing in general is a growing mode of transportation. Frost & Sullivan estimates that car-sharing grew by 117% between 2007 in 2009 in North America, and will have more than four million drivers within the next five years. Well-known car-sharing networks include ZipCar and City CarShare, which maintain fleets of vehicles for general sharing.
Recently, Spride Share announced plans to employ social networking to bring people looking to rent cars together with car owners whose vehicles are sitting idle for a while. Spride Share is a car-sharing network in which regular car owners can rent out their vehicles on an hourly basis to pre-screened drivers. Car owners benefit from sharing the costs of owning their vehicles, while renters have access to a wider network of vehicles.
(Photo credit: US National Institutes of Health, Noisy Planet site)
