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Discussion: (28 comments)

  1. Max Planck

    Wow- pretty soon, you’ll be able to do this with transexuals.

  2. Pretty sure if you have insurance on your own car – it does not cover renting it out and if you do rent it out – it will increase the risk calculation that your insurance uses to calculate your premiums.

    People have always been able to rent out their cars – not without some issues with their own insurance. the only thing that has changed is the way that people would offer the rentals – not through a peer-to-peer network – but the insurance issues have not changed.

    We have a volunteer network in our area where people can volunteer to drive others to doctor appointments and the like – and the volunteer coordinating agency as insurance to cover you and your rider – but there is a problem with your own insurance who are concerned that if something actually happens – and there is a lawsuit – even though you were told you were not covered when carrying others – as a service – that they will also become defendants and even though they may not be held liable – they will still have to pay for a legal defense.

    http://www.nytimes.com/2012/03/17/your-money/auto-insurance/enthusiastic-about-car-sharing-your-insurer-isnt.html?pagewanted=all

    1. morganovich

      larry-

      which is why getaround provides insurance for each rental.

      “Getaround rentals include insurance, backed by one of America’s largest insurance companies. Coverage includes liability, collision, property damage, and uninsured motorist protection.”

      this is in big letters all over their website. that information was also included in mark’s post.

      seriously, do you even read these things before you comment?

      1. ” USAA, which has always gotten high marks for customer service, takes an even sterner approach than the institute. I’m a USAA customer myself, and I asked the company what would happen if I or others called and confessed that we’d signed up for RelayRides.

        “We would inform them that participating in such a program will generally result in non-renewal,” Roger Wildermuth, a USAA spokesman, said in an e-mail message.

        Allstate took a similar tack. “The owner could put their current coverage for personal use of the vehicle in jeopardy as the act of making the vehicle available for rental purposes could inherently change the risk profile of the vehicle,” said Kevin Smith, a company spokesman. “And by entering into commercial arrangements with their vehicle, the insured may risk being unable to secure auto coverage from our company in the future.”

        http://www.nytimes.com/2012/03/17/your-money/auto-insurance/enthusiastic-about-car-sharing-your-insurer-isnt.html?pagewanted=all

        1. morganovich

          very selective cut and paste lar.

          ““Insurers also regularly deal with exclusions, for example, for part-time commercial purposes such as pizza delivery,” the statement continued. “Since our founding almost two years ago, we’ve been operating in Massachusetts without car-sharing legislation and without any problems. Given that we provide insurance for the rental period, we do not anticipate any problems for car owners. As with any new service, we work closely with all organizations to ensure that the best interests of all parties are protected.” I asked both Google and G.M. for comment, and neither offered one.”

          the issue of part time commercial vehicles is hardly a new one and has longstanding practices to deal with it and insurance.

          generally, you get a carve out and a separate policy for commercial use. (as is the case with getaround)

          insurers have been dealing with this a long time.

          note that the article did not list even one case of someone actually getting dropped.

          why would an insurer do so?

          if someone else is going to provide coverage for part of a car’s life, that’s a subsidy for them. it reduces their risk. why would they fight that, especially when practices around part time commercial vehicles are well established?

          1. Morg – what would you own insurance company do if you change the disclosure on your application to say that you rented your car out – to a variety of people of different ages and driving histories?

            Have you noticed when you renew your auto insurance, they want to know who drives your car?

            ages, purposes, etc

            insurance is the big problem here Morg

            Either you don’t want to believe it or you don’t want to understand it but from day one – your insurance company wants to know who drives your car besides you and it does very much affect your rates.

            People could have rented their cars long ago before the age of smart phones – if insurance companies were okay with it.

            I suspect some will be okay with it if you want to pay the higher premium…

            but I know here in Va, you cannot even drive a shuttle bus for a canoe outfitter without a CDL and commercial insurance – which I’ve been told is a bigger cost that the drivers.

          2. morganovich

            no larry, it isn’t.

            it’s easily handled through exclusions and alternate coverage.

            you seriously think getaround did not look into this?

            there are many, many vehicles that are used part time for commercial purposes and utilize different insurance while being so used.

            we had this issue with the team vans that my bike team used. it’s a very simple thing to deal with from an insurance standpoint.

            you are making up a problem where none exists.

            “Since our founding almost two years ago, we’ve been operating in Massachusetts without car-sharing legislation and without any problems. Given that we provide insurance for the rental period, we do not anticipate any problems for car owners.”

            your whole issue is a hypothetical that is contradicted by the facts. note that there was not a signle actual example of anyone losing insurance over this.

            that’s because an insurance company would be stupid to cancel the coverage. they will just put in an exclusion for coverage for shared use and let the other insurance cover it.

            this saves them money and risk and they get paid just the same.

            it is not in their interest to cancel policies over this.

            if they can cover a car for 20 hours a day instead of 24 and get paid the same with no more risk, why not?

            most auto insurance already has lots of exclusions in it. off roading, racing on a track, use as a taxi etc are probably already excluded in your coverage. this need be no different.

            you seem unable to grasp the notion of multiple insurance.

            your car policy covers you driving your car for personal use. when you “share” it, your insurance will not cover that. the coverage will come from the policies provided by getaround.

            this is not the same as commercial use in the sense of operating a jitney or a truck.

            you do not need a commercial license to rent a car, nor to borrow nor lend one.

          3. re: ” you seriously think getaround did not look into this?”

            it’s not anything for getaround to worry about.

            the risk is on the person who “rents” the car – and as I said… the option to rent that car has ALWAYS been there but the insurance companies have also ALWAYS not been too keen on the idea of providing Ad Hoc insurance to the public using a privately insured vehicle.

            Morg – you’re a smart guy but you’ve got a giant blind spot here.

            Insurance is the Achilles Heel – and always has been.

            smartphones won’t fix that.

          4. ” your insurance will not cover that. the coverage will come from the policies provided by getaround.”

            no.. your insurance then becomes a likely party to a “sue them all” lawsuit.

            Even if they win handily, they have to pay for their legal fees.

            In this day and time where people have their insurance dropped for all manner of reasons and the insurance companies now make some drivers put a tracking device on their car – as a condition of keeping their insurance…

            By the way- I understand now that traditional rental companies have these tracking device on their rentals and that they download after you rent and if you drove badly… they bill you extra for it.

          5. morganovich

            no larry, it does not.

            do you seriously not understand the concept of an exclusion?

            there are things your insurance does not cover.

            take your car out on a race track and wreck it and see if you can get your insurance to pay. bet you can’t.

            such use is excluded. you speak of blind spots, but the glaring one here seems to be yours.

            this whole issue is really, really simple. the insurer will not drop you, they will exclude car sharing from coverage (if they do not already do so).

            this is literally a one sentence piece of boilerplate. any law student could dash it off in 5 minutes.

            i’m not sure how to try and explain this any more simply larry. you are just not getting it.

            that has nothing to do with smartphones. you seem to have some weird form of tourettes on that.

            smartphones just make it easy to find a car to share on the go. the insurance is very, very simple.

            read their website lar.

            “Getaround, Inc. (“we” or “Getaround”) provides auto insurance to cover renters and vehicles that meet our membership eligibility requirements. Coverage applies for the duration of each rental, from start to finish, and includes liability, collision and comprehensive (e.g., fire, theft, vandalism) coverage. The liability, collision and comprehensive coverage we provide is primary for both owners and renters (i.e., it supersedes and replaces any and all personal auto insurances policies of both owners and renters throughout the rental period), and complies fully with both California Bill AB-1871 and Oregon Bill HB-3149 on personal vehicle sharing. ”

            http://www.getaround.com/insurance

            superceeds and replaces any and all personal auto insurance policies.

            get it? your insurance is not in effect when the car is being shared.

            i have no idea how to get this through your head.

            the issue you keep trying to raise is not an issue.

            if i share you car with getaround and run it into a ferarri, your personal insurance is not liable. that is explicitly stated in the terms of service.

          6. Morg – what has prevented the concept of people renting out their cars from happening until now?

            I seriously do not think you truly understand insurance.

            The NYT article was clear that most insurance companies even if they exclude will not be happy with you renting out your car because a future lawsuit might well come back to them.

            insurance is the problem here and it will be the undoing of these car-sharing services unless and until a specific insurance product is available that covers both uses of the car and I’m betting that insurance is going to be just as expensive as common carrier insurance.

            Morg do you know that in the DC area we have a crapload of private vans and almost all of them are dependent on a state of Virginia insurance plan because a market-plan would increase the fares to beyond what a bus charges.

          7. morganovich

            larry-

            nothing has prevented them.

            they could have done it. they did do it. what, you never loaned someone your car? you never took a filled gas tank as payment?

            these services needed mobile internet to make them work well. someone started them. why was there never a by mail dvd rental service before netflix? because no one had started one. your question meaningless.

            at some point, someone sees a business opportunity and goes after it.

            the NYT article was self contradictory and full of bad data.

            they called some clown on a customer service desk. note no quotes from executives. note not a signle example of someone who lost coverage.

            not that this quote came from the same article:

            “““Insurers also regularly deal with exclusions, for example, for part-time commercial purposes such as pizza delivery,” the statement continued. “Since our founding almost two years ago, we’ve been operating in Massachusetts without car-sharing legislation and without any problems. Given that we provide insurance for the rental period, we do not anticipate any problems for car owners. As with any new service, we work closely with all organizations to ensure that the best interests of all parties are protected”

            unlike you, i do actually know a great deal about insurance both from a policy and a business side. we’ve been involved with some firms that trade life insurance policy settlements. this is why i understand exclusions so well and supercession of insurance, concepts that seem to be beyond you.

            so, first off, the policy for getaround clearly states that it replaces your insurance. so that handles it right there.

            but let’s say it didn’t. imagine you insure my car. i’m a profitable customer. i join car share service.

            what’s your best course of action?

            you can drop me and lose my business and the profit it provides, or you can have one of your gazillion lawyers write one sentence of boilerplate excluding such use from coverage, keep my business, keep your profit, and actually have less risk than you used to.

            your whole argument is predicated on insurance companies being stupid and unable to see their own obvious self interest.

            that’s just not going to fly. insurance companies are many things, but stupid and non-desirous of making a profit are not 2 of them.

            your whole argument is based on the fact that a NYT reporter was too dumb to understand the difference between an insurer not wanting to cover car sharers vs not wanting to cover you or too big of a muckracker to bother telling the truth.

            this stuff is so simple it’s unreal.

            you really just flat out do not seem to want to understand.

            for you to be right, insurance companies would have to prefer forgoing revenues and profits from hundreds of customers to spending $100 to have some legal language written one time for everyone and putting it into policies.

            do you really think that’s how the world works?

          8. ” what, you never loaned someone your car? you never took a filled gas tank as payment?”

            not to strangers for money Morg.. and my insurance specifically alludes to this as a no-no.

            ” this stuff is so simple it’s unreal.”

            no so much Morg… if it was… these peer-to-peer would likely put Hertz and company out of business and they are not and what do you pay at Hertz for insurance?

            A LOT! right?

            Morg – you are wrong Boy.

            The REALITY right in front of you is that the peer-to-peer idea while trendy is very problematical from your own insurance company point of view.

            I’ll make you a bet guy.

            You go to your insurance company and ask them about you doing this and what the coverage options would be and I’ll match you – I’ll go to my insurance company and ask the same question -and we’ll both report back.

            Game on?

          9. morganovich

            larry-

            you are now descending into pure stupidity and outrageous assumption.

            “and my insurance specifically alludes to this as a no-no.”

            which is the point i am trying to drive home to you larry. it’s an exclusion. they will not cover you if you charge someone to drive your car. this is the easy solution for them and the most profitable.

            i have no idea why you are unable to grasp somehting so obvious.

            then you make the wild assumption that these peer to peer services will put hertz out of business. somehow, i doubt it. business travelers rent most cars. they are not going to use this. i would never use this. i prefer the flexibility of a company like hertz, the consistency of product, etc. i would also prefer zipcar for the same reason.

            it may wind up taking some small market share, but put hertz out of business? that seems like a pretty wild claim.

            and what do i pay hertz for insurance? nothing. nada. zilch. never do it.

            my policy covers my liability and my credit card covers comprehensive.

            hertz gets squat.

            further, the insurance hertz sells you is their own. they are big and capable of offering it. why would they give up margin to some outside company?

            getaround is not big enough to self insure. so an insurance co would actually RATHER have them do the rental as they could get paid there.

            my insurer is state farm. they deem my car to be used as “livery” if i share it for money through a service and therefore state that the policy does not cover such use.

            they do, however, cover use for carpooling.

            that is just as i predicted lar. it’s an exclusion.

            game. set. match.

            you’re outta there kid.

            these things are actually really simple to figure out larry.

            you look at the interests of the parties and figure out the best way to serve them.

            the insurance company wants 2 things:

            they want you to pay them for coverage.

            they want minimize the costs of doing so to make the maximum profit.

            so, if you join a car share, they exclude that from coverage and go on as before. they make the same money and take less risk.

            any other choice gives them either no money or more risk.

            it’s business larry. you may not understand how it works, but the insurance companies certainly do.

          10. Morg – I’m citing to you others, including the industry view.

            you insist on making this personal.

            you are an idiot. your refuse to see what the industry itself is saying.

            why are you like that?

            you’re telling me how insurance works while I’m citing to you – reports from the insurance industry itself – their concerns – which you immediately claim are my wrong views.

            this is dumb Morg.

          11. morganovich

            larry-

            no, you are not. you are citing a badly written NYT story by a reporter than clearly did not grasp the issue and wrote a self contradictory piece.

            i gave you a quote from the same article that disputes your view and yet you ignore it.

            i even contacted my insurer. did you call yours?

            at this point, it is personal larry. it has to do with your inability to grasp basic business concepts and your repeated absurdist claims that i do not understand insurance. it’s actually somehting i know a great deal about. ever work with guys that trade insurance policies lar? it’s not terribly complex stuff. this seems to be a personal limitation of yours. i’m not attacking you, but i am not going to describe your argument as logical, consistent, not your grasp of basic business as even rudimentary adequate based on what you are saying. you simply do not get this. you have made that very clear. how else could one describe your arguments than a decent into stupid and outrageous assumption?

            the question is not why i would describe your arguments as such, but rather why i allow myself to get sucked into these discussions at all. why are you like this lar? why do you so insistently refuse to look at basic logic and cling to bad data and though process in the face of obvious truths?

            these are all the same arguments made around zipcar and uber etc and they are all baseless and easy to handle in exactly the same way.

            if you use your personal car to give rides with lyft, your insurance does not cover it. the company gives you insurance that does.

            is it so difficult to imagine that this could work similarly?

            i have also laid out for you why your insurance co does not need to care about joining getaround. superceeds and replaces.

            do you understand how that works? those are legal terms. they make it so that your personal policy is not liable. the company’s insurance superceeds and replaces it. it becomes you primary coverage.

            this sort of thing is VERY common.

            what to you think happens if you accept the policy from hertz? it becomes your primary coverage. your personal policy is not liable if you crash.

            you are just chasing your tail here because you do not understand insurance nor liability. the problem you claim dooms this industry has already been solved with the policy structure. superceeds and replaces lar. that’s that whole deal.

            further, even if it did not, your insurer could easily mitigate this whole issue with one sentence of legal language.

            “this policy does not cover use of this vehicle through any vehicle sharing service.”

            stop and listen to yourself lar. you are claiming that insurers are going to give up business rather than drop that into a contract? even if they were not already covered by the primacy of the getaround insurance?

            how does that make any sense?

          12. Morg – I’ve given you several cites and dozens more are available.

            I’m citing to you what is on the record and you are making this personal.

            why?

            there is quite a bit of reporting that indicates that peer-to-peer is pretty problematical.

            why do you dismiss it and accuse me of essentially making it up?

            that’s wrong guy.

          13. here is another one Morg and even though the article is positive about peer-to-peer and even cites GM getting involved ..there are still insurance concerns:

            http://money.cnn.com/2012/06/08/autos/peer-to-peer-car-sharing/index.htm

            ” A nightmare scenario: There has been at least one case, as reported recently by the New York Times, in which a car owned by a RelayRides user, was involved in a fatal wreck with damages that could top $1 million.
            The case has yet to be sorted out. But because determining who pays is still unclear, the insurance industry remains leery of covering individuals renting out their cars.
            “We advise consumers who participate in peer-to-peer ride sharing to read their insurance policies carefully and talk to their insurance agent to make sure they know exactly what is covered,” said Loretta Worters, vice president of the Insurance Information Institute.”

  3. The Unknown One

    Off-topic: With the Big 7 auto makers all now reporting, Ward’s Auto says November auto sales running at 15.36 million SAAR, by far the biggest number of the recovery.

    1. Jon Murphy

      Wards will release their monthly numbers tomorrow. I am looking forward to that report

  4. morganovich

    however, i really must call BS on this claim:

    “Each shared car takes 10 cars off the road”

    this sounds awfully suspect to me.

    it would imply that each car is shared by 11 people, each of whom would have bought one on their own but now chooses to share. that sounds highly implausible.

    i’d love to see their math on that.

    1. Jon Murphy

      Yeah, I saw that too and was like “eh…that seems fishy.”

  5. As a peer to peer renter using getaround.com to rent out my car on Getaround, I feel I must chime in here between Larry and Morgan’s discussion. Morgan is correct in stating that getaround has a bridge policy that covers the car during the rental period so my own personal insurance doesn’t need to be alerted. It’s a don’t ask don’t tell policy with my auto insurance. However, the risk is on the car sharing’s insurance company, if they begin to see a spike in claims they could just as easily raise rates and forcing the sharing companies to take a larger percentage of the rental rate making sharing unattractive. Additionally, it’s only a matter of time before someone or criminal enterprise figures a way to scam this system/Insurance company. I.e think of the the NY Russian crime ring creating false accidents to collect insurance.

    Also just because a policy states that your car’s covered during a rental period, doesn’t guarantee anything. There are lots of potential loop holes that will eventually creep up (Insurance Co’s have teams of lawyers to look for these loop holes) . As someone who rents out his car on Getaround, the biggest concern I have is what if someone is running late in returning the car, doesn’t notify Getaround and get’s in an accident after the rental period?? I guarantee that getaround’s insurance will try and squirm out of paying this claim (Rightfully so) and it could be forced on the Driver. Assuming that the owner has no risk while the car is rented out is naive. I use the service since I rarely use my car, it’s fully paid for and I think there’s more upside than downside. I can list other potential issues that could (and probably will) come up that challenge the argument of the owner/insurance never being liable. I just hope that my car is not the test case. I ‘ve had a good experience so far and rent my car out about 1-2x per month. But I always rent it out with a side of caution.

    I just hope that I’m not the test case.

    1. Yes… called adverse selection. Someone who cannot qualify for normal insurance … or would have to pay sky high rates may gravitate towards easy-to-rent alternatives.

      I am in the process of checking with my own insurance but to tell the truth .. I’m concerned that even asking them the question may make them suspect that I’m already renting out peer-to-peer and downgrade accordingly.

      Where i agree with Morg and others is that it makes perfectly sense to not let an expensive asset sit idle when it could be an investment that earns money.

      But the world of insurance is also undeniable and most care rental places are pretty darn careful about renting to someone with a questionable driving record and that person with the less-than-stellar record may well gravitate to rentals that are not as strict.

      In fact, rental companies are now putting recorders in their cars and download the data after you return it to see if you were exceeding speed limits, heavy acceleration or braking, etc.

      Think about what you yourself would do if you were going to check out whoever was going to rent your car,

      How would you go about making sure the guy who rents it has a 5-10 year good driving record. You’re expecting the peer-to-peer people to do this but how careful will they be if it’s not their car? Hertz and Avis have a lot more to lose when they rent carelessly to a bad driver.

      I LIKE the peer-to-peer idea a LOT but I’m also very skeptical about the insurance side of it.

      I cannot imagine most folks who buy a new car renting it out and more likely the guy that rents is going to rent a “beater” anyhow…right?

  6. My car is relatively new and in great condition. I don’t mind renting it out. There are all kinds of luxury cars on getaround, not just old beaters. Probably can get an extra $500-$800 /month. The site has all kinds of cars, majoritu aren’t beaters. Not sure why you would even bother checking with insurance since they’re not going to support it. Getarounds insurance policy covers during rental period.

    1. the thing about a lawsuit is that if you are named, you will have to pay to defend.

      People who have trouble getting insurance will gravitate towards options which do not use the same stringent level of due diligence as if they were trying to get it themselves.

      Hertz and companies are exceptionally careful about this aspect of renting cars.

      they also keep detailed records of maintenance of their vehicles so that if there is an accident their legal folks on retainer can defend them.

      as a renter of a car, you’d have to be confident that the person renting it was actually insureable and that they were not inclined towards suing if an accident occurred.

      I think there is significant exposure with peer-to-peer rentals but only time will tell …

      I would not rent my car to a stranger even if a 3rd party told me he was “okay” and that they would insure him.

      this is why your own insurance company will not insure you if you loan or rent your car… although my understanding is that some insurance companies are going to get into the business of offering extra cost riders for that option.

      My bet is that they will require the rider if they know you are renting and the fine print on their policies will say you are solely responsible if you rent your car without notifying them and/or getting the rider.

      there is a reason why car insurance costs like the devil.

  7. There may be more risk with peer to peer but in many situations (if you live in a dense, urban area, city) it is faster, easier and cheaper to do a peer to peer as opposed to a Hetz, budget,etc. More advantages if you live in the city and need a car for a day or a few hours to just do a peer to peer since there’s a good chance there’s a peer to peer car down the street and you don’t have to go to the other side of town for a budget or Hertz. Peer to peer is better for casual day to day renting. I don’t see business travelers using it. I would never use a peer to peer for biz travel. Having keys, a car and a full tank at the airport is a convenience that peer to peer will not be able to compete with effectively. Car rental companies should look at this as more of an oppty. than a threat and find a way to get in the business. To penetrate the hourly, urrban rental market.
    If the market continues to grow, the smart insurance companies will find a way to adapt and monetize the oppty . At the end of the day, a car is a depreciating asset so why not find a way to generate revenue from that asset.

    1. don’t get me wrong. I LIKE the concept of peer-to-peer a LOT for a number of different reasons not the least of which is a more efficient market allocation of a valuable service that could well be a win-win for both sides of the transaction.

      but there is a reason why insurance is both expensive and companies seriously scrutinize would be insured and want the to be the owner or a close relative.

      It’s also clear that the risk can be quantified and valued and the insurance companies will start offering it – for a price. I just think it’s going to be pricier than normal insurance.

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