Ore. Law Changes Peer-to-Peer Car Sharing’s Insurance Implications

Oregon is on track to become the second state to allow “peer-to-peer” car sharing when legislation that removes some insurance-related roadblocks takes effect Jan. 1.

The new law bars insurers from dropping policyholders who use sharing services that allow vehicle owners to rent out their cars to strangers when they’re not behind the wheel.

Laws in most states allow insurance providers to cancel the policies of customers who use or rent out vehicles for commercial purposes.

Proponents say car sharing gives renters an inexpensive way to get around and helps owners offset some of the high costs of vehicle maintenance.

Americans pay about $8,500 a year to own and operate a midsized sedan, according to a survey released in April by AAA.

Under the Oregon legislation, the service companies that broker deals between owners and renters must provide at least three times the amount of liability coverage required for private motorists under state law. And owners will not be liable for damage done while the car is being driven by a renter.

Companies such as Getaround and RelayRides have been operating in California since a similar law took effect last year in that state.

Vehicle “renters” or “borrowers” pay as little as $5 an hour to drive a vehicle, although costs rise to $15 an hour or more for luxury and sports cars, according to service companies.

Convenience is a major part of the attraction, with most rentals carried out online. Owners are paid by the service, minus fees, and are not liable for damage done by other drivers.

Renters often use key cards or smart phones to access vehicles and, because coverage is already in place, there is no need for them to carry private proof of auto insurance or other paperwork.

About Gregor McGavin
Gregor McGavin is an award-winning journalist who has reported across the country for such publications as The Associated Press, the Arizona Republic, the Pittsburgh Tribune-Review and the Press-Enterprise.

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