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Car sharing in MA: What you need to know before sharing your ride

By April 22, 2018September 19th, 2018Insurance

It is always wise to consult your agency and/or insurer when considering something that may affect your insurance policy. This is especially true for a “car-sharing service.” (Massachusetts Department of Insurance). Car-sharing services, where cars are rented on an hourly basis or for some other short period of time, have grown popular in recent years, especially in urban areas like Boston. Zipcar, for example, has popped up all around college campuses and was founded in Cambridge.

Recently, “peer to peer” car sharing services where car owners rent their personal vehicles out to others, like Getaround and RelayRides, have become popular as alternatives to traditional rental cars.

Companies like Getaround claim that top-earning renters in their service can make up to $10,000 a year just by making their cars available when they aren’t in use. While it is always tempting to earn extra income, especially in a passive, hands-off manner, car owners need to do their due diligence before becoming a part  of a sharing program.

Before considering making your car available for one of these programs, it is absolutely necessary to review your coverage with your insurance agency. Most Massachusetts insurers explicitly prohibit making your car available for rental for a fee or other economic inducement. Violating this prohibition could invalidate your policy. (Mass DOI) You DO NOT want to be on the hook for big time damages if you’ve rented your car out to someone who gets involved in an accident, drives drunk or somehow damages your vehicle.

Read your policy carefully- and review the policy or the car-sharing service company carefully, as there may be important information about insurance coverage in this agreement. Make an informed and educated decision before you choose to share your car or another person’s car. (Mass DOI) Speak with your insurance agency beforehand, not after someone who rents your car runs a red light and gets hit by oncoming traffic.

If you have experience insurance-related problems with a car-sharing service, or want to know more about the insurance risk of car-sharing or ride-sharing, call us or contact your account manager directly.