In the past few years, many Americans have begun putting their automobiles into car-sharing programs, which enable others to drive them from time to time for a fee. But, this new trend seems to be tricky for insurance industry regulators and participants alike, for a number of reasons, and therefore insurance agents may need to keep a close eye on the ways in which policies may have to necessarily change to accommodate this fact.
Experts point out that these car-sharing services provide their members with additional liability coverage, often up to $1 million, and that is supposed to serve as some kind of insulation against problems for existing auto insurers, according to a report from TIME Business. However, while such excess liability coverage can be used to protect passengers, pedestrians, other cars, and property, it does not cover the driver, or the car.
These programs, therefore, have become a point of contention in a number of states nationwide, with the most recent being Colorado, the report said. Elected officials in that state are about to consider a bill that would make car-sharing services have to go through an authorization process, and would regulate them afterward, potentially as a means of smoothing out any potential ambiguities in terms of who would be responsible for covering which costs.
Why the increase in rates then?
Some experts believe that the ways in which these services are changing the auto insurance industry could lead to rates for everyone – regardless of participation in them – going up, the report said. This is because auto insurers would, under current strictures, not have any way of knowing when or which of their policyholders are putting their cars into these services overall, and thus the potential for added risk might have to be spread across the entire pool of customers. Others, though, say that there needs to be more evidence collected to see just how much of an impact these services have on liability overall.
Regardless of how things stand right now, if auto insurance rates start to go up, that could lead many consumers to start shopping around for new and more affordable coverage. Insurance agents may therefore need to monitor the situation and determine whether there will be any chance for them to potentially increase their business as a result of these changes.