Car Sharing Programs: Is their insurance coverage enough for you?
By Daniel E DAngelo Esq on November 7, 2013
Car sharing programs have become more popular in Denver, and rightfully so, as they provide an affordable and convenient alternative for anyone without a car. Even though most car sharing programs include some level of insurance coverage with their membership, you should thoroughly evaluate what that coverage includes and whether the coverage is adequate for you. Below is a brief summary of several Denver car sharing programs’ insurance coverages as described on their websites. This summary should not be used as a substitute for doing your own investigation, and we encourage you to checkout their websites, talk to their representatives, and consult others qualified to make recommendations about your insurance needs.
eGo Carshare’s website says it offers full insurance coverage, its membership agreement states its vehicles are insured under a comprehensive insurance policy, and its handbook says they provide $1,000,000 in liability coverage. Unfortunately, full insurance coverage is a misleading phrase as it isn’t really a type of insurance coverage. Comprehensive coverage generally means their vehicle is covered for damage to the car not involving a collision with another car for example damage from fire, explosions, earthquakes, floods and riots, or theft. Their website does not say whether they offer uninsured or underinsured motorist coverage. Coverage could be denied for violation of member rules, like drunk driving. If you want further details on their insurance coverage, eGo Carshare’s website directs you to make an appointment at Ego Carshare’s office. For a link to their website click here: eGo CarShare
Car2Go’s Terms and Conditions describe their coverage to include liability insurance coverage for bodily injury and property damage to a maximum of $100,000 per person/$300,000 per accident; (b) basic no-fault benefits if the applicable state or province has adopted a no-fault statute (Colorado is not a no-fault state); and (c) uninsured motorist bodily injury coverage with a coverage limit equal to the lesser of: the statutory minimum limits of uninsured motorist coverage defined by the laws of any applicable state or province. Because Colorado does not require uninsured motorist coverage like it requires liability insurance coverage, but only that insurance companies offer uninsured motorist coverage which can be rejected in writing, it is unclear whether Car2Go covers its Colorado members with uninsured motorist coverage. Insurance coverage can also be lost for a violation of Car2Go’s Terms and Conditions. Car2go also advises its members to seek other insurance protection for claims not covered by car2go insurance. For a link to their website click here: Car2Go
Occasional car calls the insurance they offer comprehensive up to $1,000,000 per accident with a $1,000 deductible. Although it is possible their insurance only covers damage to their car, $1,000,000 seems excessive for just property damage. Thus you should probably call Occasional car for additional information and clarification on the extent of their insurance coverage, to verify if it includes liability coverage and/or uninsured motorist coverage. For a link to their website click here: OccassionalCar
Zipcar’s also calls the insurance it offers as comprehensive insurance, and is described in further detail as a combined single limit policy of $300,000 per accident for members over 21. For members under 21, coverage is provided up to the minimum financial responsibility limits by law in the jurisdiction in which the accident occurs or the claim is adjudicated. In Colorado, the statutory minimum insurance coverage is $15,000 for property damage, and $25,000 per person and $50,000 per accident for liability coverage. Engaging in a prohibited use such as using the zipcar in an imprudent, negligent, or abusive manner or any other abnormal use of a vehicle or driving while using your cell phone without a hands-free device (which Colorado does not prohibit), will result in loss of insurance coverage. For a link to their website click here: zipcar denver
As you can see, the insurance coverages offered vary widely between programs and their use of generally accepted insurance terms may mean something different than what is typical in the insurance industry. Because there is the possibility you could lose coverage for a violation of the car sharing program rules you may decide that a separate personal car insurance policy is right for you. It is also unclear whether any of the above programs include uninsured or underinsured motorist coverage for their Colorado members. Thus, more clarification is likely needed and the purchase of a separate personal car insurance policy with uninsured or underinsured motorist coverage may be something you decide is right for you. Without this type of coverage, if you are involved in an accident that is not your fault, and the other driver who caused the accident does not have insurance or a very small amount of coverage, the car sharing program may not provide you any coverage and you may be stuck with large past and future medical bills, out-of-pocket expenses, and/or losses such as lost wages.
For more information about types of car insurance see my previous blog posts Do you have the right car insurance coverage? and A Good Automobile Insurance Resource: The Rocky Mountain Insurance Information Association.