Check Adequacy of Insurance When Using Hourly Rental or Car Sharing Services
RelayRides is a company with which many local residents may soon be familiar. The business, which is being backed by funding from Google and General Motors, is slated to open nationwide in the coming months. RelayRides allows residents to essentially rent out their own cars on an hourly basis to those who do not have a car themselves. The business therefore allows car owners the chance to make extra money using their idle car while providing a handy service for those who just need a car on chance occasions.
However, our Panama City car accident lawyers understand that this program raises many interesting legal questions, perhaps most importantly: what happens in the event of an accident when using a shared car?
Those who rent their own cars should rightly be concerned about what happens if the one who is using their car gets in an accident. Private insurance companies will likely not provide any coverage. That is because car insurance policies rarely provide coverage when a car is being used for commercial purposes--such as being rented out as part of the RelayRides program.
As the spokeswoman for the Insurance Information Institute explained in a recent New York Times article on the topic, "If the 'renter' were involved in an accident, most likely the insurer would non-renew or maybe even rescind the auto policy. Similarly, a USAA spokesman explained that if a customer participated in a program like RelayRides, the insurance company "would inform them that participating in such a program will generally result in non-renewal." The Panama City accident attorney at our firm appreciate the potential consequences of these insurance issues for local residents.
RelayRides is aware of the concerns, and so the company provides $1 million in coverage for car owners in the event that a user hurts another in an accident while renting the car. This is an important and prudent step, but it still leaves a few questions. For one thing, any damage over $1 million might lead to personal liability. The Panama City car accident attorney at our firm knows that when serious injuries are involved (like brain injuries) or multiple people are injured, the total damages can quickly exceed $1 million.
Perhaps even more concerning, there is a chance that the company's policy may not apply after an accident. For example, the RelayRides terms of service explain that the company disclaims warranties for fitness for a particular purpose. Also, in some areas the car sharing company may legally be able to go after a car owner following an accident if they deem the owner to have misrepresented the fitness of the vehicle. In other words, there are concerns that if a car is not properly maintained and ends up in an accident, the owner might not be covered by the company's $1 million policy. If the owner's own policy doesn't apply, then the individual may find themselves in a particularly difficult situation.
In the end, there is still a lot of legal uncertainty around some of these issues. However, it is important for local residents to fully consider these concerns before deciding whether or not to participate in these programs.