It’s really exciting to see how Car2Go is taking off in Seattle. It’s particularly dear to my heart as I have been driving a 2005 Smart Car since when it was one of the few in Seattle. They are a blast to drive and particularly to park—not to mention the mpg and smaller carbon footprint.
When I was growing up, my dad used to say that it was probably more cost effective to take cabs than to own a car—once one factor in maintenance, the cost of the car, gas, and, ironically (as NRG was founded by him!), insurance. This adage of my father’s always gave me pause. But it’s just this concept that is being embraced by the users of Car2Go and Flex cars.
What do you need to know about the insurance implications of using these car services? We want to make sure that you are well protected.
Here are some Car2Go insurance factoids with my comments in bold.
What is the insurance coverage?
The Car2Go insurance provides to qualifying members (and other Car2Go authorized drivers) insurance as follows:
Liability insurance coverage for bodily injury and property damage to a maximum limit of $100,000 per person/$300,000 per accident; …(and $50,000 for property damage, they tell me). This coverage is for personal damage that you would do to another vehicle and/or their occupants. These limits are very low. We recommend $500,000 combined single limit for all clients, which simply means that there is no per-person limit AND the limits are much higher. Even the $50,000 property damage is low. Have you priced the new Tesla sedan? It’s $100,000 to replace it, and we have had several Seattle clients buy them. It’s easy to total a car, and then you’d be responsible to pay for it.
Basic no-fault benefits if the applicable state or province has adopted a no-fault statute; …This refers to Personal Insurance Protection, or “PIP,” in Washington, which covers medical expense, loss of income, and some other expenses regardless of fault. We recommend the highest limit(?) each policy can offer, which is usually $35,000. If you’ve ever had a neck injury and need to have medical treatment you know why $10,000 is very low!
…and uninsured motorist bodily injury coverage with a coverage limit defined by the laws of any applicable state or province. In Washington State this is $25,000 per person/$50,000 per accident. This is coverage for YOU, not for those you would hit. Most Car2Go clients are driving alone, which actually means you will have $25,000 of uninsured motorist coverage for medical and all related expenses if you’re hit by a driver with no, or not enough, insurance. How far does $25,000 get you if you’re even more than slightly injured? You’ll never get more than $50,000 if both seats are occupied—they are a two-seater, after all!
Unless the member has obtained a loss damage waiver, (not available in Washington State), the member will be responsible for:
- a deductible of $1,000 (in the national currency of the “Home Area”) if any accident occurs or damage is suffered by reason of the fault of the member (or other driver of the vehicle)
- fault for any accident or damage that cannot be determined or
- damages for any accident or loss that cannot be recovered from a third party. The good news on all of this is that unless you are at fault, you will not have to pay anything to fix the car if it is damaged on your watch.
Car2Go also tells me that only the authorized drivers have coverage for these vehicles. So, if you’re the member who is actually renting the car, you’re covered, but you can’t loan this car to anybody else. Family members aren’t covered unless you have them assume the rental at the time they get behind the wheel. Pretty important stuff!
Next week I will talk about some solutions to the coverage limits and gaps that I have identified and will speak to these questions:
- If you have car insurance with another car, how does this affect your coverage with a Car2Go vehicle?
- If you have no other insurance, what can you do?
- What if you are a business and your employees are using these vehicles?
In the meanwhile, I hope you have as much fun as I do driving “your” little Smart Car around Seattle.
Happy travels!