Car Sharing Is Coming To Your Town
http://www.iinc.org/articles/402/1/Car-Sharing-Is-Coming-To-Your-Town/Page1.html
Published on 04/25/2011
During tough economic times, drivers find creative ways to save money. Some simply drive less. And there's a new breed of driver that looks to make money by sharing a car with others.
The trend of personal car sharing is gaining momentum across the country. Dubbed “personal vehicle sharing” or “peer-to-peer” car sharing, it ranges from eco- sensitive drivers looking to lessen their carbon footprint to cost-conscious car owners looking to save money.
During tough economic times, drivers find creative ways to save money. Some simply drive less. Others buy more efficient cars. And there’s a new breed of driver that looks to make money by sharing a car with others.
The trend of personal car sharing is gaining momentum across the country. Dubbed “personal vehicle sharing” or “peer-to-peer” car sharing, it ranges from eco- sensitive drivers looking to lessen their carbon footprint to cost-conscious car owners looking to save money.
Unlike commercial car sharing programs that operate their own fleet of vehicles, personal car sharing relies on private vehicle owners who are willing to share their own car while it sits idle.
New companies promoting this type of car sharing are developing business models where they take a percentage of the car sharing transaction (often about 30 percent) for matching available vehicles with eager drivers and providing insurance coverage while the car is being shared. Private vehicle owners get the remainder of the transaction fee.
Because auto insurance policies in California typically exclude the commercial use of private vehicles, the state Legislature in 2010 passed a law mandating conditions under which peer-to-peer car sharing is allowed and creating rules for providing insurance for drivers who participate in the approved programs.
Provisions of the law include:
• The legal definition of a personal vehicle sharing program qualified to do business in California;
• Requirements that personal vehicle sharing programs provide full auto insurance coverage, independent of the car owner’s coverage, during all times the vehicle is being shared;
• Mandates that the car sharing company maintain detailed records of participating cars’ operations, and make those records available to the car’s owner and primary auto insurance company;
• Authorization for the car owner’s insurer to exclude all coverage while the vehicle is in use for car sharing; and
• Payment may not exceed the yearly owners’ cost to operate the car. If the car’s owner turns a profit from sharing, then the car would be classified as a commercial vehicle and require a commercial auto insurance policy.
Car sharing companies can install data recorders in the vehicles being shared to track the time and miles driven under the sharing agreement. The law also requires that the company maintain auto insurance coverage on the car of equal or greater value than that secured by the vehicle’s owner, and it must be at least more than three times the minimum liability level mandated by state law.
Drivers interested in sharing their vehicles should consult with their insurance agent or company representative to understand the total impact of such a program on their insurance policy.
ADDITIONAL ARTICLES
Car Sharing Legislation
Car Sahring Association
During tough economic times, drivers find creative ways to save money. Some simply drive less. And there's a new breed of driver that looks to make money by sharing a car with others.The trend of personal car sharing is gaining momentum across the country. Dubbed “personal vehicle sharing” or “peer-to-peer” car sharing, it ranges from eco- sensitive drivers looking to lessen their carbon footprint to cost-conscious car owners looking to save money.
Car Sharing Is Coming To Your Town
During tough economic times, drivers find creative ways to save money. Some simply drive less. Others buy more efficient cars. And there’s a new breed of driver that looks to make money by sharing a car with others. The trend of personal car sharing is gaining momentum across the country. Dubbed “personal vehicle sharing” or “peer-to-peer” car sharing, it ranges from eco- sensitive drivers looking to lessen their carbon footprint to cost-conscious car owners looking to save money.
Unlike commercial car sharing programs that operate their own fleet of vehicles, personal car sharing relies on private vehicle owners who are willing to share their own car while it sits idle.
New companies promoting this type of car sharing are developing business models where they take a percentage of the car sharing transaction (often about 30 percent) for matching available vehicles with eager drivers and providing insurance coverage while the car is being shared. Private vehicle owners get the remainder of the transaction fee.
Because auto insurance policies in California typically exclude the commercial use of private vehicles, the state Legislature in 2010 passed a law mandating conditions under which peer-to-peer car sharing is allowed and creating rules for providing insurance for drivers who participate in the approved programs.
Provisions of the law include:
• The legal definition of a personal vehicle sharing program qualified to do business in California;
• Requirements that personal vehicle sharing programs provide full auto insurance coverage, independent of the car owner’s coverage, during all times the vehicle is being shared;
• Mandates that the car sharing company maintain detailed records of participating cars’ operations, and make those records available to the car’s owner and primary auto insurance company;
• Authorization for the car owner’s insurer to exclude all coverage while the vehicle is in use for car sharing; and
• Payment may not exceed the yearly owners’ cost to operate the car. If the car’s owner turns a profit from sharing, then the car would be classified as a commercial vehicle and require a commercial auto insurance policy.
Car sharing companies can install data recorders in the vehicles being shared to track the time and miles driven under the sharing agreement. The law also requires that the company maintain auto insurance coverage on the car of equal or greater value than that secured by the vehicle’s owner, and it must be at least more than three times the minimum liability level mandated by state law.
Drivers interested in sharing their vehicles should consult with their insurance agent or company representative to understand the total impact of such a program on their insurance policy.
ADDITIONAL ARTICLES
Car Sharing Legislation
Car Sahring Association