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Getaround, Like Other Car-Sharing Apps, Poses Insurance Issues
Getaround, which recently came to the Chicago area, is a new twist on what it calls “peer to peer car sharing.” With apps like Uber, drivers use their private cars to give rides to people, much as a taxi would. With Getaround, drivers rent out their private cars. All of these programs pose some serious insurance issues that you should consider if you or anyone you know is thinking of signing up.
First, most insurance companies exclude liability and physical damage coverage for vehicles that are used for a fee. In other words, if you give someone a ride for money or rent your car to someone for a fee and the car is involved in an accident, your insurance most likely will not cover the loss. The Chubb exclusion, for example, states, "We do not cover any person for damages arising out of the ownership, maintenance, or operation of a vehicle while it is being used to carry people or property for a fee." The most important word here is “any.” If you or someone you rent your car to has an accident, your insurance will not respond. Period.
Insurers also exclude liability and physical damage coverage for business use of a private vehicle. So, for example, what would happen if a person rented your car through Getaround and then used it to make a delivery for a fee? Most carriers probably would invoke this exclusion as well as the exclusion of coverage when you are using your car for a fee, as a way to make the point that they have no intention of covering such a loss.
Some car-sharing programs – including Getaround and Uber – do have insurance that is supposed to protect the owner of the car. But there are a lot of questions involving when exactly that insurance is in force and when the individual’s insurance is in force. And many carriers are canceling the policies of drivers they find out are car-sharing for money, whether or not they have filed a claim.
Plus, of course, there would be nothing to keep someone who was injured by your car from filing a lawsuit against you personally, especially if he or she wanted to recover more than the limits of the Getaround or Uber policy. Even if you eventually prevailed in that suit, you could be tied up in court for years and incur thousands of dollars in legal fees. And if you have an open claim on your auto or umbrella policy, it is virtually impossible to change insurance carriers until it is resolved.
There are also issues of safety and other kinds of liability. For example, drivers who give rides to strangers face the same kinds of risks that taxi drivers face, up to and including being injured or killed by a fare.
If you rent your car to a stranger, you also face risks. What if the driver causes some damage that is not immediately obvious, and then does not tell you about the damage? What if the driver uses your car for illegal activity, causing your car to be seized as part of a criminal investigation?
Clearly more and more people are deciding they don’t need a full-time car, and companies are coming up with ways to meet the needs of those people. There probably are benefits to the planet from reducing the number of cars, and there might eventually be financial benefits to people who choose to share their car in some way. But we feel that, right now, the risks to you as the car owner far outweigh any benefits you might receive from giving rides for hire or renting your car to strangers.
If you would like to talk to us further about this or any other insurance issue, just contact us at 847-572-0820 or firstname.lastname@example.org.