Car Pooling - Part 2
Note: Please be sure to read "Car
Pooling - Part 1"
You have already learned
that many drivers use different ride-sharing arrangements. The typical
automobile insurance policy covers these arrangements because the driving
exposure is essentially the same. The common policy exclusion that refers to
"public or livery conveyances" is to prevent coverage for business
situations. Using a car or SUV that is insured by a personal auto policy to
transport people or goods for hire is unfair to insurers. The premium a company
charges for personal use is inadequate to cover "public or livery
conveyances" that are typically:
In other words, such use
calls for more careful underwriting, different or special coverages and a
higher premium. However, group-driving arrangements are another form of
personal use such as using a car for commuting, vacations, personal errands,
etc. The result is that a "personal" premium compensates an insurer
for most pool arrangements.
Are There Other Coverage Considerations?
Yes. Car owners may worry
if their insurance is affected if another member of a pool is driving their
car. The answer is that any person using the vehicle with the car owner's
permission is covered along with the car owner.
Persons who drive in
carpools may want to discuss the details with their insurance agent. An
insurance agent may recommend that you carry higher bodily injury liability
insurance limits. Higher medical payments limits may also be in order.
Providing full details can help an agent make sure that any fees involved in
the arrangement represent coverage for the driver's operating expenses and not
additional income.
A New Development
A new arrangement has
developed. Some states are creating share-the-ride driving arrangements where
different drivers use the same vehicles at different times of the day. In
Conclusion
In most instances, using a
car in a typical share-the-ride arrangement or car pool will not affect the
protection under the personal auto policy. The fact that passengers offer
financial help to cover auto expenses is unlikely to eliminate insurance
coverage since the car is not being used as a "public or livery
conveyance." However, any fees received by a driver from car pool
passengers should only reflect a reasonable share of the gas and oil expense
and depreciation on the car. Do you still have questions about your situation?
If so, contact your insurance agent, a professional who's in an excellent
position to provide you with answers.
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