This bill ensures that Californians who allow their car to be used in a carsharing pool don't inadvertently void their automobile insurance coverage
Background
Car sharing is a way to have access to a car without owning one. Car share vehicles are available for members at unattended, self-serve locations distributed throughout cities and campuses. Wireless and internet technologies allow members to reserve cars, access them, and then pay for the time and/or miles they used.
Because occasional use of a shared vehicle costs significantly less than car ownership, car sharing saves money for households and small businesses. Car sharing reduces traffic congestion, pollution, and the need to build more parking.
Car sharing programs have been successful in densely populated areas such as city centers and university campuses, and can potentially expand into less dense locations.
The Problem
Car sharing companies would like to expand their pool of vehicles to include privately owned cars to be used during times when their owners are not using them.
Unfortunately, receiving even a small amount of money for the use of one%u2019s automobile could constitute commercial use of that vehicle, and thereby invalidate the private individual%u2019s insurance coverage.
This potential of having one%u2019s insurance inadvertently cancelled prevents car sharing firms from expanding their pools of vehicles to include privately owned cars.
The Solution
Assembly Bill 1871 establishes that placing a private vehicle in a car sharing pool does not constitute commercial use of a vehicle. This means private individuals can allow their vehicles to be used in car sharing pools, and be paid for the cost of wear and tear, without compromising their own automobile insurance coverage.
The Legislation
- Defines Car Sharing Organization
- Defines Personal Car Sharing
Adds a provision to the Insurance Code that %u201CPersonal Car Sharing%u201D is the act of providing access of a private vehicle for purposes of sharing a car. Requires that insurance coverage be provided when the private vehicle is used by others.
- Personal Car Sharing is not Commercial Use of a Vehicle
Adds a provision to the Insurance Code that provides that motor vehicles insured by their owners shall not be classified as a commercial vehicle, for-hire vehicle, permissive use vehicle, or livery solely on the basis of it being used for car cost-sharing if the revenue generated by car cost-sharing does not exceed the annual expenses of operating the vehicle.
