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Vehicle Sharing? You Probably don't have Coverage on Your Auto Insurance.

by Treva Cassidy, ACSRC on Feb 27, 2014

What is a Vehicle Sharing program?  It is a great idea in theory: while you are away, you sign up with one of the companies that offer the service and leave your vehicle at an airport or other location and let another person who is visiting your area rent your car at a low rate.  The average rental from a standard car rental company is around $30/day.  The new idea behind vehicle sharing is that borrower of  your car pays $10 or so to use your car.  While they are using it, you are not paying for the parking of your car and you make a few dollars too.  Most of these types of companies also clean your car and  put in the same amount of gas that you left.    Logan Airport's central parking garage's current rate is $54 for the first day and $27 each additional day!  Yikes, I can see why a vehicle sharing program sounds like a good idea to the average traveler.

So does your policy cover your car for damage the borrower causes?  What about covering the borrower for injuries or covering other people involved in an accident if the borrower is at fault? The short answer is no.  Most of the companies in MA (and many other states) have adopted an exclusion of coverage for Liability and Physical Damage to your car, including Collision & Comprehensive if you participate in such a program.

I've checked out a few vehicle sharing program websites and taken a look at their insurance sections.  One site states it has a $1,000,000 insurance policy available to protect you while your car is being rented.  Sounds like a lot but what if the driver is at fault for an accident and seriously injures someone and you are named in a suit as the vehicle owner?  What if the driver violates the rental contract, will their policy still cover your car? What if that suit is awarded more than a million?  What if you are found negligible in some way due to the condition of the car?  Your personal auto policy, that normally would pay to defend you is probably not going to pay for any defense costs. I also read on the site while your car is in their possession and not being rented, there is no coverage for damage from things such as weather, acts of nature or anything that is reasonably outside of their control.  So, if a tree falls on it while it's in their lot, they won't cover it.  Your personal auto policy will likely NOT cover your car either especially if it has the Exclusion listed. 

As you can see, there are many questions regarding the insurance for this situation.  I'm sure as this type of rental program gains popularity, many more issues may come up. If you decide to participate in a sharing program, please carefully read the contract and know how your policy will or most likely will not respond should anything happen while your car is in the possession of someone else.  If you have questions on your policy at any time, please give us a call, we are always here to help you make informed decisions regarding all your insurance needs.

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