Car Sharing Services Have Their Own Set Of Risks

Written By: Stef Turner on June 8, 2010 No Comment

If you live in in a big city, owning a car can be both expensive as well as a headache. Finding a parking place may compete with locating a Taliban commander in its difficulty. Paying for parking can leave a major hole in your pocket book. Because of the sheer number of motorists on the road, auto insurance charges tend to be higher in large cities. Fuel economy is reduced during city driving because of the fairly slow speeds and repeated stops. As a result, many city residents are saying no thank you to vehicle ownership and relying upon other options. Mass transit continues to be an essential choice, however a comparatively new concept is taking over in some U.S. metropolitan areas: car sharing.

As outlined by CarSharing.net, at the beginning of 2010 there were 27 vehicle sharing programs in the U.S., helping 388,000 members and sharing 7,500 automobiles. They go by names like Zipcar, Car2go, and Community Car. The programs charge a yearly membership fee and may even bill an application fee; Zipcar, for instance charges a $50 annual fee and a $25 application fee in the Washington, D.C. area. Another fee is applicable for every usage of a car (for instance, $30 for a four-hour reservation), which covers gasoline, insurance, and a specified number of miles.

The types of individuals most likely to utilize a car sharing service include:

* Those who usually make use of public transportation yet who require their own car on occasion

* People who own one car and from time to time require a second

* People who own compact vehicles but occasionally require a larger automobile

* Those who do not want to buy a car but could afford the membership fees

* Individuals who wish to steer clear of the inconvenient parts of vehicle ownership, like upkeep, costs, and parking costs

* Naturalists concerned about the air pollution which comes with vehicle ownership

A person using a vehicle sharing service takes risks similar to those she would take while driving a rental car. She may have legal liability for injuring someone or damaging another’s property while using the car. She may suffer injuries in an accident, resulting in healthcare expenses as well as forfeited income. She may damage the car and be accountable for repair costs. The car sharing service offers liability insurance, however the borrower has no guarantee that the level of insurance is going to be enough to pay for all of the damages. Also, that insurance may not apply if she allows an unauthorized individual to drive, for instance a “designated driver” after a night on the town. If she doesn’t own a vehicle, she might want to obtain a named nonowner car insurance plan, that’ll cover liability, medical, as well as uninsured or even underinsured motorist claims over and above what the car sharing service’s policy provides. Additionally, certain umbrella liability policies might cover damage to a borrowed car if the car sharing service’s plan isn’t going to pay. A professional insurance agent could determine insurers that provide these kinds of insurance coverages and make clear the differences in protection as well as cost associated with the various policies.

For individuals residing in locations where it’s accessible, car sharing may be a very sensible alternative to owning a car. Like every special service, it bears certain risks. Nevertheless, by making some basic arrangements in advance, motorists can benefit from these services and be self-assured that they’ve reduced their financial risks.

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