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Car sharing: how am I insured if I am the renter or owner?

Car sharing is a cost-effective alternative to owning a car. But what’s the insurance situation if an accident happens with a rented car? Or if you let your neighbour use your car? Helvetia expert Peter Plachel has tips for people who share cars with others.

26 May 2016, text: Katrin Meier, photo: iStock

A woman driving backwards
Carsharing is a cheap alternative to your own car. But what about your insurance?

When it comes to cars, owning is passé. You can also rent or share a car. “Sharing instead of owning” is becoming increasingly popular and easier thanks to apps and internet portals. According to estimates, over 5.5 million Europeans now share a pool of 77,000 vehicles. Driving is worry-free since insurance will pay in case of a claim. But there are some things to keep in mind.

It’s always better to rent a car from a professional provider or a reputable portal. Insurance cover in this case will be handled by the provider and must be taken out with the car lease.
If you rent a car from a traditional car rental company, car manufacturer or garage, you don’t have to worry about insurance. “In these cases, the providers take care of the insurance themselves,” says Helvetia expert Peter Plachel. This is also true for Mobility, a car sharing provider. The company owns the vehicles that it leases, so it has taken out the cover it needs. “In case of a claim, car renters are fully covered for claims under liability, accidental damage and, optionally, passenger accident insurance,” says Plachel. The premiums for these types of insurance are already factored into the rental charge. The customer is only responsible for a specified deductible in case of a claim. Plachel advises checking the deductible amount before signing the contract: “If you want to keep the deductible as low as possible, all you usually have to do is pay a premium surcharge.”

Renting a car through sharing portals

The situation is different if you use other people’s vehicles through internet portals like Sharoo. “While the accidental damage part is covered, the deductible is usually not negotiable.” In some cases, supplementary insurance is included, such as passenger accident or assistance insurance. If you rent a car through this kind of portal, you have to accept the insurance as is. The premium is added to the rental charge. In contrast to direct providers of rental cars, liability insurance is usually not covered when you lease a car through a car sharing portal, only the deductible and the loss of bonus on the vehicle owner’s policy. Because of road traffic legislation, the actual liability claim is settled through the vehicle owner’s personal insurance policy, which is irrelevant to the person who rented the car.

Mechanical breakdown: who pays for the damage?

If your rental car breaks down, immediate assistance is usually provided. “Insurance cover always includes breakdown assistance,” Plachel explains and recommends dialling the provider’s emergency number provided in the documents. “Also, the repair costs are usually the rental car provider’s responsibility because the renter expects to receive a non-defective vehicle.” The only instance when renters could be liable for repair costs is if they contributed to the breakdown by disregarding indicators. For example, if the customer continues driving the car even though the engine oil light is lit up red and so causes damage to the engine, it will be held against him.

Private car rentals: who pays in case of a claim?

The situation is different yet again if you rent a car from a private individual and pay for it. “In this case, I would definitely recommend clearing up the insurance cover before using the car,” says Plachel. “In most cases, you don’t have much of a choice but have to accept the insurance the way it is.”
A car that is shared by several people should be well insured, Plachel advises: “Good insurance will protect you from financial losses and litigation in case of a claim.” The expert recommends taking out comprehensive insurance especially for new vehicles or cars with a high market value as a total loss or an expensive repair of the vehicle is a huge financial risk. You should also ask about supplementary insurance. “Bonus protection insurance is certainly a good investment, in this case, you won’t punish the other people sharing the car with a premium increase if you have an accident.”
The road traffic authorities consider only one person to be the owner or keeper of the vehicle, even if several people share it. This is the person in whose name the insurance policy is issued. “When taking out the insurance, it is important to declare that the vehicle will be driven by several people on a regular basis.” These people will then be added to the policy as frequent drivers. But there is no need to take out special car sharing insurance. The group can determine the scope of the cover.

Regular renting: comprehensive cover is well worth having

If you only let others use your car on occasion and don’t get paid for it, you generally don’t have to notify your insurer. “However, as soon as you rent your car out to other private individuals on a regular basis, you are required to notify your insurer,” says Plachel. That’s the only way to avoid debate in case of a claim. Your premiums may go up, but that’s a decision that your insurer will make on a case-by-case basis. “The trickier issue is the insurance cover,” Plachel cautions. “The private car rental provider must be aware that neighbours or co-workers cannot take out insurance cover for the vehicle.” For this reason, the expert recommends taking out comprehensive insurance in this case, too, so that the owner won’t be forced to demand reimbursement for accidental damage or a deductible from the other person in case of a claim.

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