Car Sharing Liability: Are You Covered? - Injured
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Car Sharing Liability: Are You Covered?

As society becomes more environmentally conscious, people have begun to look for transportation alternatives that spare the air. Among the choices, ride-shares are particularly popular. That is, until car sharing liability rears its ugly head.

RelayRides is an online company that allows car owners to rent out their vehicles for $10 per hour. It handles the reservations, payment system, and background checks on renters. All owners have to do is provide their car and cash the checks.

But who's at fault when an accident happens?

It's a simple question with a complicated answer.

Unlike with traditional carpooling, the people driving through programs like RelayRides generally don't own the car they're in. This creates an insurance coverage issue.

RelayRides tries to solve the problem by carrying $1 million coverage for any accidents.

That sounds like a lot, but what happens when the injuries are over $1 million? That's a problem currently being resolved after a RelayRides driver allegedly caused an accident that killed him and injured four people.

One attorney for a victim in the accident lists his client's damages between $1.2 million to $1.5 million, The New York Times reports. RelayRides' insurance only covers each incident, not each person injured. And considering the attorney's estimate was for just one individual, the final damage tally could be in the multi-millions of dollars.

The party responsible for paying whatever damages leftover is still unclear. But car owners are a good target since they're required to have insurance by law.

Because plaintiffs will no doubt want full compensation for their injuries, once a car sharing company's insurance limit is reached, suing the owner next is logical.

Car sharing liability has also caused some insurance companies to shy away from renewing policies of owners who participate in them, The New York Times reports. The same story also cites a federal law that may shield companies like RelayRides from having to pay up at all.

Whether the law actually will is another story. For now, the problems surrounding car sharing liability might be something to consider before jumping into these eco-friendly programs.

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