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P2P Car Sharing Won’t Invalidate Insurance in California

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Cars 8 by Elsie esq. on Flickr

Image by Elsie esq. on Flickr

A new law that allows car owners to rent out their vehicles without invalidating their insurance policies recently went into effect in California. The change means that so-called “peer-to-peer” or P2P car sharing has become easier for those who would like to participate.

Governor Arnold Schwarzenegger signed the bill last September, but before January 1 of this year, California drivers would invalidate their car insurance by renting out their vehicle because it was considered a “commercial” use.

According to a press release from Assemblymember Dave Jones (D-Sacramento), who wrote the bill, “The new law makes clear that personal vehicle sharing does not constitute a commercial use of the vehicle. The law also makes sure that the individual car owner is not held liable for losses that arise when the vehicle is used for personal vehicle sharing.”

This opening up of the P2P car sharing market is potentially great news for both those with cars who would like a little extra income and those without who would like the option of renting a car for the weekend from a person rather than from an agency.

“Owning a car can be expensive and vehicle sharing programs are a great way to help connect people with cars when they need them,” said Jones. “The new law will help car owners shrink the cost of owing their vehicles, reduce the need for some people to buy cars, improving parking and traffic congestion, and help the environment.”

Indeed, both the Environmental Defense Fund and the Sierra Club of California supported the measure, as did Bay Area Rapid Transit (BART) and car sharing groups nationwide such as City CarShare, Spride, Gettaround, RelayRides, Go-op Inc., and Divvy.com.

What do you think of P2P car sharing? Do you take part or would you if it was a possibility in your area?

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January 27th, 2011 at 9:58 am