Owning a vehicle is expensive. The monthly payments, the insurance premium, the ongoing maintenance, the ever increasing price of gas, and other expenses all add up to a significant part of many people’s budgets. Which is just one reason why car sharing is gaining in popularity.
Services such as Zipcar and Communauto make it easy to grab a vehicle when you need one, without the hassle that typically comes with owning a vehicle. Especially for those living in a major urban centre, car sharing can make a lot of sense. But, there are some things you should know about when it comes to using a car sharing service and your insurance.
Tanisha Kishan, RATESDOTCA expert and chartered insurance professional, says that any time a person signs up for a car sharing service, during the period of time when the vehicle is being delivered and driven under the terms of the car sharing agreement, any damage caused by accidents will fall under the commercial insurance policy. This is the case whether you’re the lender of a vehicle or a driver.
“However, this doesn't necessarily mean that it won't affect your personal auto insurance premium if you get in an accident while driving the car sharing vehicle,” says Kishan. “Both accidents and driving infractions, such as speeding tickets, can potentially impact your personal auto insurance policy."
This is something to keep in mind if you don't currently have an insurance policy but one day will, as it means that your driver’s abstract could have a record of any collision, which insurance providers would see when you apply for coverage.
Another thing to keep in mind, Kishan cautions, is that how you drive when you’re behind the wheel of a car share vehicle can also impact your car insurance rate. Tickets for behaviours like speeding or distracted driving will cause your rate to increase, no matter whose vehicle you’re driving.
“Because you are ticketed as an individual, any tickets you incur while driving a car share vehicle will impact your personal auto insurance policy," says Kishan.
Some of these car sharing companies' memberships include what’s known as “secondary insurance.” If you have your own auto insurance, you can often bring that with you if you have the provision of rental car coverage. This is known as your primary coverage. However, most car share companies also provide their own insurance “secondary” to your primary policy. This can provide additional coverage while you’re using the car share vehicle. If you don’t have personal insurance coverage, however, you’re still covered under the car share company’s policy.
Keep in mind that not abiding by the terms and conditions of your car share contract can mean the company doesn’t cover you in the event of a collision. For example, allowing a non-member to drive the vehicle can void your insurance coverage through Zipcar.
Additionally, many car share companies offer what’s known as a damage fee waiver or damage protection plan. This is available at an additional cost, and helps to cover your financial responsibility for damages arising from your use of the vehicle (usually a set fee per event).
Before purchasing a damage fee waiver or protection plan, you should check to see if you already have rental vehicle collision coverage through a credit card or personal automobile insurance policy that would apply to and cover the damage fee. A damage fee waiver or protection plan is not insurance and does not provide or alter your insurance coverage.
Finally, always be sure to read the fine print of any car sharing company’s agreement, as coverage levels will vary depending on your province or territory of residence, as well as the provider.
"The car insurance that car share companies offer will depend on what insurance provider they use,” says Kishan. “Make sure to read the fine print so you know what you're signing up for."