The latest wrinkle in having a
vehicle to drive when you need it is to sign up with a car-sharing company and
pay to drive someone else’s car. If you live in an urban area of the country,
chances are such a company may be in operation near you. What do Florida car insurance companies think
about this?

Generally, they are not pleased.

Florida Car Insurance Companies

The rental model works this way: A
car owner contracts with a car-share company to let someone else borrow the car
for a fee. The company takes a cut of the fee for making the arrangement
possible. A key is exchanged and the person renting the car takes off for an
evening, a day, a week, or whatever period the contract stipulates and then
returns the car to the owner.

The problem with this in the eyes of
Florida car insurance companies—and insurers
everywhere else—is that the insurance policy covering the car is pegged to the
policyholder, not to some stranger. The policy is predicated on the driving
habits and police record of the car owner, whereas the person with whom the
owner is sharing the car might have much poorer driving habits or a record of
speeding convictions or DWIs.

This system of insurance seems like
an entirely practical way to issue policies and retain some control of the
situation. After all, people are the problem. Car insurance premiums would be
really low if the expectation is that they would never be started and run on
the road. In other words, it is the drivers of the vehicles—not the vehicles
themselves—that pose the risk.

“If the ‘renter’ were involved in an
accident, most likely the insurer would non-renew or maybe even rescind the
auto policy,” Loretta Worters, a spokeswoman for the Insurance Information
Institute, told a New York Times interviewer in March. It follows that if the
car-sharing concept catches fire and races across the country, insurers will
have their antennae up for accident trends that threaten the viability of the
companies.

Perhaps Florida car insurance companies will develop an insurance product that
covers this new wrinkle in auto use. Till that happens, car owners should
understand the possibly adverse implications of renting out their
cars.  

About Edge Auto Insurance

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