Friday, July 1, 2011

Risks of car-sharing

Hank Stern at InsureBlog has posted on the risks to car-owners who sign up with car-sharing companies, which coordinate the very short-term rental of private individuals' cars to local people who need to, say, make a grocery run. (These companies should not be confused with Zipcar, which rents out its own cars.)

I strongly agree with Hank's basic point, which is that you should be cautious about insurance issues before signing up with a car-sharing company, because there may be no coverage under your policy if the car is involved in an accident while rented out.

Hank points out that one car-sharing company states that it provides liability coverage to renters, and therefore presumably not to the owners. If he's right then the car-sharing company has demonstrated a shocking lack of judgment, and no one should sign up with it. It is not worth the risk.


Anonymous said...

Would you comment on the insurance terms here please?

Nina Kallen said...

I can't comment on a specific program. (My own malpractice carrier wouldn't like it.) I would say that, generally, if you are considering whether insurance is adequate you need to weigh the likelihood that a loss will occur, the likelihood that a loss will exceed the policy limit, and the cost of the insurance.

Nina Kallen said...

And, of course, what and who is covered and excluded.

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