Car enthusiast? Your insurer is not

People with cars idling (and most of the cars are idle most of the time) can earn money by renting to other people who need a car, sometimes but not often enough to have a. At some point, the world should ultimately less cars and places to park their. It feels more green and sharing is polished.

But then the adult show, in the form of insurance companies. I called the this week following the announcement by RelayRides, a capital risk from Google Ventures and General Motors Corporation, he was its national car-sharing service.

And adults are not happy. They want you to know that RelayRides insurance is not sufficient in the case of a catastrophic accident and that your own insurance company can take your insurance if it is even that you are ready to your car to someone in exchange for a few dollars an hour.

Therefore any person considering this kind of thing must ask: is the insurance industry exaggerated the risk of playing with this idea of advanced, RelayRides underestimate your exposure, or both?

RelayRides is one of several car-sharing services to arrive on the scene in recent years. Getaround is an another start-up, such as JustShareIt and Wheelz, a company that giant carpooling Zipcar invested in last month.

They are all part of a wider "collaborative consumption" movement that has captured the imagination of a growing number of civic, addicted mind Web people who want to save money and use a little less resources of the world. It's home-sharing services like Airbnb, sharing services Office such as the Loosecubes and general sharing as a NeighborGoods and Rentabilities sites.

Carpool services you provide, in effect, transform your personal car a Zipcar and lease time or day. You set the price and the intermediate service lists your car online, connects with people who want to rent, and takes a tax reduction. Tenants use a smart card to open your locks and get to the key, or you can exchange the key in person. G.M. RelayRides investment holds the promise of G.M. OnStar service opens the car for you, too.

For all of this work, there are a few mental hurdles that car owners must clear out the widespread fear strangers and what cooties they leave on the steering wheel. Are they safe drivers? (Usually car sharing services check records conducted.) Someone is trying to steal my car? (Yes, this will be, if it is rather expensive and the car company is not appropriate controls, this problem has already put a company out of business).

But the biggest challenge is insurance. Here's the basic problem: car, generally, insurance companies will not cover a claim resulting from you put your personal vehicle in commercial use, say by running a service taxi on the side - or do it yourself a Hertz solo. RelayRides is well aware of this and provides liability coverage $ 1 million where a driver kills or maims of someone else using your car. This is intended to fill the gaps in the coverage created by the fact that your own insurance company refuses to pay this claim if the victim has come after you.

This raises questions about three possible situations.

First of all, if a sort of catastrophic accident results in a claim over $ 1 million, what happens then? The answer is that you may be responsible for payroll. The chances of an injury this horrible and a legal judgment that accuses you rent your car to someone who hangs it are extremely low. I put on the chances of long in a column the year last on the Zipcar insurance for tenants (I link to it in the online version of this column.)

Only, you may be uncomfortable how makes you judge.

Second, the rules change if you have not taken good care of your car, and contributes to an accident? RelayRides service conditions appear to protect society in the present case, since "disclaims" any "guarantee" to "fitness for a particular purpose. Meanwhile, in Oregon, which relates to the insurance for car sharing quite precisely a law gives the right to go after the owners of vehicles who engage in the "false in the maintenance of the vehicle."-car-sharing companies

RelayRides and its General Counsel with two points counter. First, they say that language elsewhere in the conditions of the company replaces the warning of physical fitness. Second, the Act of Oregon and its bar probably high for "wrong" side, the RelayRides insurance broker, Bill Curtis, made the following promise: "I am ready to raise my hand and say,"Yes"to the question of whether the owner will have protection in case they are prosecuted and the allegation is that the car has not been maintained," he said.

Third, there is the question of what your insurance company think about all this. I had a hard time finding, frankly. GEICO responds to any of my requests for comment.

A group of industry, the Insurance Information Institute, is at the same time, not happy. "If the"lessee"was involved in an accident, the insurer would not renew or perhaps even probably cancel auto policy", Loretta Worters, his spokesman, said in a statement by e-mail. Translation: If someone destroyed your car and injures a person and a lawyer tries to reel in your insurer as insurer of the car-sharing company, your insurer may take your coverage.

RelayRides opposes this, because the word "Cancel" could make people believe that insurance companies could withdraw coverage retroactively. "It is ridiculous," said Mr. Curtis.

USAA, which always took notes for the customer service, takes a sterner even the Institute approach. I am a client of the USAA myself, and I asked the company what would happen if I or others called and admitted that we had signed to RelayRides.

"We would advise that participate in such a program will generally result in non-renewal," Roger Wildermuth, a spokesman for the USAA, said in an e-mail message.

Allstate took a similar tactic. "The owner could put their current coverage for the use of the vehicle in danger as the Act to make the vehicle available for rental purposes could fundamentally change the risk profile of the vehicle," said Kevin Smith, a spokesman for the company.  "And in concluding trade agreements with their vehicle, the insured may may be unable to obtain automatic coverage of our company in the future.".

Ann contributed Carrns reports.

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