In 2010 California passed AB 1871 into law, creating what it hopes is a solution to insurance concerns that previously made Californians wary of using car-sharing programs. Car-sharing companies let individual vehicle owners rent out personal vehicles while receiving a small fee, generally ranging in price from $3 to $15 per hour. While the extra money was attractive to many people, car owners did not want to be liable for the damages resulting from car accidents when they were not driving. Insurance companies might also be reluctant to insure vehicle owners in car-sharing programs, and often insurance plans had gaps in their coverage for vehicles in car-sharing programs.
The new law makes California car owners not liable for damages caused while someone else is driving his or her car being used through a car-sharing program. Additionally, a car owner will not have to purchase additional insurance, such as commercial, for-hire, or livery insurance, just because they own a vehicle which is being used in the program. Finally, a Californian who participates in a car-sharing program cannot be dropped by an insurance company just for participating in the program.
The law mandates the car-sharing company itself insure the car while being driven by someone who is not the owner. The company must have at least as much insurance as the owner's own policy, and at least three times California's minimum liability insurance limit.
Not All Car-Sharing Insurance Questions Have Been Answered
Because the law is relatively new, some issues do not appear to be completely resolved. For example, if the owner of the vehicle is at fault for not properly maintaining the car, and the lack of maintenance directly results in an accident, will the owner be covered? There may be some legal questions in the future regarding insurance coverage denial from accidents that occur from these peer-to-peer sharing groups.
If you have been denied insurance coverage from your provider, contact an attorney immediately. Insurance providers are bound by the terms of your agreement, and an experienced attorney can help you get the compensation you deserve.
