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How Car Sharing Affects Your Car Insurance Quote

March 31, 2015
Auto Insurance, Insurance
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Thanks to new car-sharing services, you might be able to get by without a car of your own, or maybe cut back to one vehicle in your family. That could mean saving money on car insurance coverage.

Car sharing takes a few forms but basically is a service that allows you to quickly reserve and use cars you don’t own. It’s different from ridesharing services such as Uber and Lyft, which connect passengers with drivers.

Do car-sharing companies provide insurance?

Generally, yes, although the level and type of coverage vary quite a bit among companies.

“The insurance offered by these companies is not standardized,” the industry group Insurance Information Institute notes. “It is therefore important to go to the company’s website to read the insurance coverage information carefully.” If you have questions, you should call the car-sharing company, the III suggests.

Here are details from some major car-sharing companies.

Zipcar provides liability coverage plus personal injury protection in states that require this coverage. Members face a damage fee of up to $1,000 per incident, unless they buy a waiver. Drivers under age 21 get only the state-minimum liability coverage.

Car2Go provides liability, uninsured motorist, and collision and comprehensive insurance (with a $1,000 deductible), plus personal injury protection in some states.

Enterprise CarShare’s insurance coverage varies by state, but generally includes state-minimum liability insurance, with the option to pay for more coverage, and a $500 member responsibility for damage, with the option to pay a damage-waiver fee.

Many cities have local car-sharing programs that compete with the national offerings. San Francisco’s City CarShare, for instance, covers members for liability, collision and comprehensive. (The driver is responsible for a $500 deductible, although you can pay $1 per hour to lower that to $50.) The insurance doesn’t cover personal property in or on the vehicle. The driver is also on the hook for any damage the company’s insurance doesn’t cover.

These companies rent out vehicles they own. Other operations, such as Getaround, connect people who need to use a car with vehicle owners in a peer-to-peer operation.

Getaround provides insurance that covers liability, collision and comprehensive, uninsured motorists and theft. RelayRides provides liability, collision and comprehensive coverage to car owners. Renters get liability coverage and can decline comprehensive and collision or get coverage with a deductible of $2,500 or $500.

Your credit card company might cover deductibles or provide other insurance coverage for rental cars, although you should check whether the coverage extends to car sharing.

What if I still have a car?

If you’re keeping car insurance for you or your family, check whether your coverage extends to your use of car-sharing vehicles.

If you use car sharing to eliminate the need for a second family vehicle, you may be able to save money on car insurance.

Mileage driven per year is a big part of your car insurance quote, so lowering that will cut your rate. Also, many insurers offer usage-based insurance, in which your premium is based on how much you drive, among other factors.

Startup Metromile bills itself as “designed for people who drive 10,000 miles a year, or less.” It charges a base fee, plus a per-mile rate, although it’s currently available only in California, Illinois, Oregon and Washington.

Other programs — such as State Farm’s Drive Safe & Save, Progressive’s Snapshot, Allstate’s Drivewise and Esurance’s DriveSense — give discounts for miles driven and safe driving behavior.

The upshot is that joining a car-sharing service could be a good reason to get a new car insurance quote.

Aubrey Cohen is a staff writer covering insurance for. Follow him on Twitter @aubreycohen and on Google+.

Image via iStock.