What is Your Liability if You Rent a Car to Someone Else and They Are Involved in an Accident?

Car sharing is becoming a significant business in the United States and in California in particular. In the last decade alone, car-sharing programs have grown from less than 200,000 to more than 1.5 million. The market has brought in many investments from huge companies, like Toyota and Avis Budget Group. But what happens if you rent your car in this way and the renter is involved in a car accident? Keep reading to get the facts, and then contact Law Offices of Fernando D. Vargas at 909-982-0707 if you require a free legal consultation.

Your Insurance Cannot Be Cancelled for Talking Part in a Personal Vehicle Sharing Program

When he was still governor, Arnold Schwarzenegger signed legislation that made it illegal for insurance companies to cancel coverage for private passenger vehicles due to the fact that the owner got involved in a personal vehicle sharing scheme.

That said, the amount of money the owner makes from renting their vehicle cannot be more than the cost of owning and operating their vehicle. Additionally, a person cannot say that their vehicle is for rent and then get payments from strangers. The vehicle owner must joint a legal entity that is qualified to do business in California and that provides liability insurance coverage whenever the car is actively being used for sharing. During these times that the vehicle is not being used for sharing, the individual’s policy does not apply.

There Are Risks to Renting Your Car to Someone Else

Of course, this does not mean that you are off the hook and there is no risk if you rent your vehicle to someone else. Some in the industry say that while it might not be legal for a car insurance company to cancel your insurance due to car sharing, that law does not prevent them from deciding not to offer a renewal when your current insurance is up.

Sometimes Simple, Sometimes Complex – Always Worth Talking to a Personal Injury Attorney

If you rent your car out to someone and they are involved in a fatal accident, do you really have zero liability? The truth is that these programs are new enough that not all aspects of the laws that affect these cases have been tried. However, you would be wise to contact an attorney who can fight to ensure that your rights are covered.

You can do that by contacting Law Offices of Fernando D. Vargas at 909-982-0707 for a free legal consultation.