You have undoubtedly read about (and perhaps even used) a personal vehicle sharing program (also known as a peer-to-peer car sharing program) like Turo, which allows you to rent another person’s car for a defined period of time. Turo puts car owners together with people who have a short-term need for a vehicle. Need a 2018 Porsche Macan in Chicago? $312, unlimited miles.
But what happens if the driver of that vehicle causes a wreck? Does the car owner’s liability insurance apply? Is there liability on behalf of Turo? Does the liability insurance of the driver apply?
And what if the wreck is caused by the driver of another vehicle? Does the UM/UIM coverage on the shared vehicle apply? Or will coverage be denied because the car owner received money for sharing the vehicle?
These issues are discussed in this timely article, Sharing is caring with proper auto insurance: why car sharing can’t catch a brake.
Here is what a recent (2021) Tennessee statute says liability insurance in these circumstances:
(a) A peer-to-peer car sharing program shall assume liability, except as provided in subsection (b), of a shared vehicle owner for bodily injury or property damage to third parties or uninsured and underinsured motorist losses during the car sharing period in an amount, as stated in the peer-to-peer car sharing program agreement, that must not be less than the amount set forth in subsection (d).
(b) Notwithstanding the car sharing termination time, the assumption of liability under subsection (a) does not apply to any shared vehicle owner when:
(1) A shared vehicle owner makes an intentional or fraudulent material misrepresentation or omission to the peer-to-peer car sharing program before the car sharing period in which the loss occurred; or
(2) A shared vehicle owner has acted in concert with a shared vehicle driver who fails to return the shared vehicle pursuant to the terms of the car sharing program agreement.
(c) Notwithstanding the car sharing termination time, the assumption of liability under subsection (a) applies to bodily injury, property damage, uninsured and underinsured motorist, or losses by damaged third parties to the extent required for proof of financial responsibility, as defined in § 55-12-102.(d) A peer-to-peer car sharing program shall ensure that, during each car sharing period, the shared vehicle owner and the shared vehicle driver are insured under a motor vehicle liability insurance policy that(1) Provides insurance coverage in amounts no less than the minimum amounts for proof of financial responsibility, as defined in § 55-12-102; and(2)(A) Recognizes that the shared vehicle insured under the policy is made available and used through a peer-to-peer car sharing program; or(B) Does not exclude the use of a shared vehicle by a shared vehicle driver.
(e) The insurance requirement described under subsection (d) may be satisfied by motor vehicle liability insurance maintained by:
(1) A shared vehicle owner;(2) A shared vehicle driver;(3) A peer-to-peer car sharing program; or(4) Any combination of those described in subdivisions (e)(1)-(3).
(f) Except as otherwise provided for in this section:(1) The insurance described in subsection (e) that is used to satisfy the insurance requirement of subsection (d) is primary during each car sharing period;(2) If coverage is applicable through more than one (1) motor vehicle liability insurance policy as set forth in subdivision (e)(4), then the order of priority of coverage is as follows, unless one (1) policy contains a provision affirmatively stating that the policy’s coverage is primary and thereby is primary during the car sharing period:(A) A policy maintained by the shared vehicle driver is first in priority;(B) A policy maintained by the peer-to-peer car sharing program is next in priority; and(C) A policy maintained by the shared vehicle owner is last in priority; and(3) If coverage is applicable through more than one (1) motor vehicle liability insurance policy as set forth in subdivision (e)(4) and more than one (1) of those policies contain a provision affirmatively stating that the policy’s coverage is primary, then the order of priority of coverage is as described in subdivisions (f)(2)(A)-(C).(g)(1) The peer-to-peer car sharing program shall assume primary liability for a claim when:(A) The peer-to-peer car sharing program is in whole or in part providing the insurance required under subsections (d) and (e);(B) A dispute exists as to who was in control of the shared motor vehicle at the time of the loss; and(C) The peer-to-peer car sharing program does not have available, did not retain, or fails to provide the information required by § 55-12-305.(2) The peer-to-peer car sharing program may seek indemnity from a shared vehicle owner if the shared vehicle owner is determined to have been the operator of the shared vehicle at the time of the loss.(h) If insurance maintained by a shared vehicle owner or shared vehicle driver in accordance with subsection (e) has lapsed or does not provide the coverage required by subsection (d), then:(1) Insurance maintained by a peer-to-peer car sharing program must provide the coverage required by subsection (d) beginning with the first dollar of a claim; and(2) The peer-to-peer car sharing program has the duty to defend the claim, except under circumstances as set forth in subsection (b).(i) Coverage under a motor vehicle liability insurance policy maintained by the peer-to-peer car sharing program is not dependent on another insurer first denying a claim nor is another motor vehicle liability insurance policy required to first deny a claim.
(j) This section does not:(1) Limit the liability of the peer-to-peer car sharing program for any act or omission of the peer-to-peer car sharing program itself that results in injury to any person as a result of the use of a shared vehicle through a peer-to-peer car sharing program;
(2) Limit the ability of the peer-to-peer car sharing program to, by contract, seek indemnification from the shared vehicle owner or the shared vehicle driver for economic loss sustained by the peer-to-peer car sharing program resulting from a breach of the terms and conditions of the car sharing program agreement; or