Massachusetts Motor Vehicle Insurance Issues in Car Sharing
What happens when you lend your car to a friend in Massachusetts and he gets into and accident? What happens if she is injured? Generally, injuries from Massachusetts motor vehicle accidents are covered by the insurance company that insures the vehicle you are in, or the insurance company for the driver of the vehicle that caused the damage. Thus, if you are injured because someone ran into your car’s rear end, that insurance company would cover the damages. If the other vehicle had no insurance, or the driver took off and failed to give you their information, the vehicle you are in would cover the damages.
However, there is a new trend in Massachusetts, called car sharing. The clever business minds behind a company called RelayRides came up with a brilliant way of saving money for car owners and for drivers who didn’t own vehicles. And it’s environmentally sounder, too. The idea is that folks with cars who don’t need them all the time offer their vehicles to patrons of RelayRides who rent the vehicles via the program. It’s the Zipcar for owners! They even cover Massachusetts insurance.
Unfortunately, last February there was a collision in which the driver, in a RelayRides vehicle, may have caused a tragic accident and died. Other people were seriously injured. Which insurance company covers there injuries? RelayRides paid the owner of the vehicle for her vehicle, which was a total loss. However, the owner was then dragged into the insurance claims process because she was the owner. She has $300,000 in coverage per accident and RelayRides has $1,000,000. This seems like a lot, but in addition to the death of the driver, three others were seriously injured, including multiple facial fractures, broken wrists, and partial disabilities.
What if you were the car owner? You thought you were doing the correct thing–sharing your vehicle since you didn’t use it; going through a reputable company, RelayRides; having Massachusetts car insurance (Commerce); and having RelayRides’ insurance for the paying driver. But the laws are not clear on what, if any, personal liability goes to you. What if RelayRides’ insurance pays the full policy and Commerce pays the full policy, but a jury decides the cases are worth more? Are you personally responsible?
In this case, there is no clear law. We intend to keep you updated on this new company and how the insurance issues resolve. But in general, should you lend your vehicle to friends? Of course. Should you borrow a friend’s vehicle? Sure, but…the but is that you need to have sufficient insurance and Massachusetts underinsurance coverage.
What is underinsurance? Underinsurance is insurance you buy in addition to the minimum insurance to protect you when you or your passengers are injured because of another driver when that other driver is insufficiently insured. We always recommend that our clients get sufficient underinsurance coverage. Since Massachusetts only requires liability coverage of $20,000 per person and $40,000 per accident, if you are seriously injured by someone else who is at fault, all you can collect is their minimum coverage. If you have sufficient underinsurance coverage, you can collect up to the amount you have! This will also protect you if you are a victim of a pedestrian accident in Massachusetts or of a bicycle accident in Massachusetts.
Massachusetts uninsurance coverage, which is part of the same line item and pricing in Massachusetts motor vehicle policies, protects you when the other vehicle leaves the scene of an accident, or when the owner actually did not have insurance. It covers you if the vehicle that struck you was stolen, because stolen vehicles are uninsured to the driver that steals it.
If you are a victim of a motor vehicle, pedestrian or bicycle accident in Massachusetts, call an attorney with over 25 years of experience at 617-227-7423.