Insurance Issues With new car sharing companies

Insurance Issues With new car sharing companies -

car rental companies have been around almost as long as cars have. The model is very simple: the rental company has a fleet of cars and drivers renting from the company. When you rent a car, a combination of your own insurance and insurance purchased by the rental company covers you for accidents that may occur. Moreover, many experts recommend against buying supplemental insurance that car rental companies peddle the counter. (See our previous post: Auto Insurance Renatl - do you need)
However, while they are still not great threat to traditional business car, there is a new loan car game in the city. The first major player in the new world car sharing was Zipcar, which is now available in most American and European cities. Zipcar, as a traditional rental company, has its own vehicles. The difference between Zipcar and Avis or Hertz is mainly in technology and convenience. With Zipcar, you sign up for the online service and can then take a drive in your neighborhood more or less whenever you want. Zipcar is convenient, but now there is a new paradigm that there will be even more revolutionary.
Companies like RelayRides, Getaround, Wheelz JustShareIt and do not have their own car fleets. Instead, they use yours. In a business model that is like couch surfing for cars, a car owner can choose to rent their cars to the previously selected drivers. At first glance, it seems that the genius. The owners are thrilled by the idea that instead of their cars sitting idle all day, they are there working and earning money. Tenants get all the benefits of owning a car without the hassle and daily costs. And the environment pushes a sigh of relief
Unfortunately, all folds have been developed yet -. You might risk your car insurance, or more. There are also many unanswered questions that raises the article, such as: What if an accident results in a catastrophic claim of more than $ 1 million, are you responsible? What if you have not been taking good care of your car and contributes to an accident?
traditional car insurance is not set up for this kind of car sharing and major insurance companies strongly recommend against participation. Most insurance agencies believe that the rental car is a violation of the terms of your auto insurance policy. The New York Times reports that the Insurance Institute of America, in an emailed statement, said: "If the 'tenant' were involved in accidents, most likely the insurer non- renewal or maybe even cancel the auto policy, "USAA, said in the same NYT article says that" We (car owners) that participation in such a program will generally result in non-renewal inform ".
However, it may be too early to write off these companies completely. Given the convenience and undeniable appeal of these non-traditional car-sharing programs, insurance companies can find a way to keep everyone happy.

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