If the Beach Boys were to release a 2015 rendition of their ’60s hit, “I Get Around,” the lyrics might include terms like Zipcar and Car2Go, or Uber and Lyft. These are some of the latest ways people are getting around nowadays — referring to car sharing or ridesharing.
While both practices have grown, so have the complexities and ramifications surrounding them. Among the latter for personal auto insurance policyholders is the coverage— or more accurately lack of coverage their policy provides for such activities. To begin with, it’s important to more thoroughly understand each and the difference between them.
Understanding the Terms
“Car sharing,” explains Emma Grossman, Regulatory Affairs Specialist with NYCM Insurance, “occurs when people ‘rent’ personal automobiles for short periods of time, often by the hour. An example would be me driving to work, knowing I will be there for eight hours without need for my car and letting someone ‘rent’ it for some of the time I’m working, through a service like Getaround.
“Car sharing can also be using a company that has cars people can borrow by reserving them and using them by the hour or day. Zipcar and Car2Go are examples of such car sharing companies.
“Ridesharing,” she continued, “entails the owner of a personal automobile picking up a rider using a phone application. The rider ‘e-hails’ the driver using the application, the driver accepts and picks up the person while being paid via the phone application. Uber, Lyft and Sidecar are ridesharing companies.”
Neither is Covered!
Both car sharing and ridesharing have brought attention to insurance coverage issues. “The important thing for NYCM insureds to remember,” Grossman emphasized, “is that their personal auto insurance policy does not provide coverage for these exposures, since they reflect commercial use of their vehicle. Many consumers are not aware of this.”
Legislators are focusing on ensuring that the ride and car sharing companies are mandated to provide coverage, putting it in the commercial insurance arena. Some already do, but with varying approaches and many underwriting and pricing matters still vague. The overall regulation of transportation network companies, as they are known, is similarly in debate.
In New York State, interest has spread upstate from the metropolitan area. Ridesharing legislation failed to pass this year, but in preparation for the 2016 legislative session, the Insurance Committee chairs of both the Assembly and Senate were planning fall roundtables involving stakeholders in all regions.
The subject is certain to generate headlines in the months ahead as technology, innovation and appropriate administration are blended to best serve and protect all who “get around” in New York State.
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