Calif. Lawmakers Move to Address Auto-Insurance Issues Arising From Car Sharing

Calif. Lawmakers Move to Address Auto-Insurance Issues Arising From Car Sharing

The increasing number of companies aiming to get car owners to rent their vehicles to strangers when not using them themselves begs the question: How will the services affect the owners' auto insurance?

The California Assembly today took a shot at addressing that question by approving first-in-the-nation legislation allowing Californians to share their personal cars in car-sharing pools without risking the loss of their personal auto 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.

The bill, A.B. 1871, makes clear that personal vehicle sharing does not constitute a commercial use of the vehicle. It also ensures that the individual car owner is not held liable for losses that arise when the vehicle is used for personal vehicle sharing.

"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," the bill's author, Assemblyman Dave Jones (D-Sacramento), said in a statement.

AB 1871 enjoys widespread support from various groups, including the Environmental Defense Fund, Sierra Club of California, American Planning Association of California and Community Action to Fight Asthma.

This bill has also received broad support from car sharing and personal vehicle sharing organizations across the nation such as City CarShare, Spride, Gettaround, and RelayRides.

Indeed, the bill has no apparent opposition and was approved with a bipartisan, unofficial vote of 63 to 0. It now moves to the state Senate for consideration.

Scott Doggett:  is an AutoObserver.com Associate Editor.