Car Sharing and the Possible Insurance Implications

Given the costs associated with owning, maintaining, insuring and sometimes even storing a private vehicle, it’s no surprise that these days, particularly in metropolitan areas, the model of car-sharing is becoming more popular. Individuals who live in large urban areas may decide to divest themselves of their own vehicle and replace it with what amounts to ride-sharing or, just as often, short-term car rental. But what does that mean in the event of an accident?

Do you still need insurance even if you don’t own a car?  If you rent from a car-sharing company, the vehicle’s owners will probably take responsibility for damage to the car itself. But what if the accident and the damage it caused is your fault? Who pays for the doctor bills and legal fees?

Exposure to liability in the case of an accident is often the cause of personal and professional disaster. If you are judged to be responsible for medical and litigation costs, which are always on the rise, everything you own could be at risk. You could lose your home, your business and even see garnishment of your wages for the rest of your life. A little pre-planning can save you from these frightening possibilities.

It’s a good idea to consider the insurance implications BEFORE you cancel your auto insurance, even if you have an excellent reason – like the car-sharing option – to do so. If you cancel your auto insurance policy when you sell your car, insurance companies will charge you a premium if you ever decide to re-instate a policy to cover potential car-sharing liability. As a matter of course, insurance companies penalize people who have gone for any time without coverage. It is wise to examine your options before you cancel anything.

The first thing to do is to meet with a trusted insurance agent.  It’s possible that your state has special rules for folks who opt for car-sharing. Too, some carriers might view the car-sharing risk as a commercial one and refuse to insure you outright. It’s very important to know your options in the beginning.

A good option to consider is non-owner insurance.  A policy like this is designed to offer you shelter from liability no matter what car you drive. Whether it be a short or long-term rental, or your Aunt Hilda’s 1976 Buick, you’re covered. This choice is a particularly good one if you intend to use public transportation most of the time and car-share occasionally. The bonus is that having a policy such as this one will keep you from being “uninsured” just in case you ever want to go back to car ownership.

As we all become more environmentally aware, car-sharing might seem to be the greenest, most environmentally responsible answer to your transportation problems. Still, it pays to carefully examine how this new lifestyle will affect your bank-book. There are very real risks involved in this option. It may, at first, appear to be a huge savings – a win/win situation. But we live in a litigious world. Now, more than ever, it’s critical that we safeguard ourselves and our families by weighing carefully even small changes to your insurance safety-net.

Out there beyond your front door there are people who will take advantage of even the smallest fender-bender to feather their nest forever. You need protection from them. Your knowledgeable insurance agent can help you find the best, least expensive way for you to protect your assets whether or not you decide to own your own car.

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