Car sharing: risks and insurance

VolverThe steady and unstoppable technological advances together with the undeniable reality of living in a society more and more globalised have been the perfect mix to foster the gradual rise in these past years of new technologies. Searching for competitive prices and the valuable help that provides the development of many mobile applications or apps have led to the founding of new businesses that expand their branches to places that some years ago we though unexpected and which we use many times even every day.

One of these new businesses is car sharing, an option that is more and more attractive because of the indisputable benefits that it brings. This new business model allows users to better cover their particular transportation needs, not only by saving money, but also by saving time when moving around, which otherwise would require more effort in the cities which are increasingly more congested by traffic.

In this vein, the reasonableness that brings collaborative mobility also has obvious positive effects from an environmental point of view, promoting the reduction of greenhouse gases that, unfortunately, are currently relevant.

However, within this business model we find a wide range of services or types among which we may choose according to our needs. Thus, and in very abridged form, we find:

- Carpooling.- It is one of the types more established in Spain, with well-known companies as BlaBlaCar or Amovens, offering the opportunity to connect users to carpool and share costs in mostly long trips.

- Peer-to-peer car rental.- We may be find ourselves before the next boom in the carsharing industry with SocialCar at the head. This model, wide developed in the real estate industry, offers the possibility to offer our car whenever we are not using it, paying a fee related to the use time.

- Ridesharing.- Who has never used Uber or Cabify? This system is where we find the two world-leading companies of transportation with driver. In this model, the user contacts with a driver that, for a short-distance urban trip, charges a fee depending on the time, date and place.

- Carsharing.- Lastly, we find the one type that we are going to analyse. It is defined as a short-time rental of vehicles of a collective fleet of a company or cooperative in exchange of a price foreseen by a fee depending on the period of use and the distance covered. Within this type, we find several companies providing services with highly competitive prices, such as Bluemove, Car2go, Emov, Zity…

It is worth noting that every new business model logically brings always hesitations on the legal framework of the provided services. And, as in the current case, this is not an exception.

In Spain, unlike Germany, there is not an ad hoc regulation ruling the provision of this service and, according to the representatives of the Spanish Carsharing Association (AEC, in Spanish), this is one of the most pressing issues.

Germany counts, form March 2017, with a Carsharing law that might lay the foundations of a potential future regulation for which the Spanish industry is crying out. This carsharing preferential treatment law (Law CsgG) incorporates a variety of concessions to this type of companies and, therefore, to their users, such as: exclusively dedicated parking spaces in public roads, both for those providing free-floating services without a fixed parking station and for those providing round-trip services with a fixed parking station. Similarly, it provides for tax exemptions and discounts for the vehicles.

In Spain, the demands of the sector represented by the Spanish Carsharing Association go beyond, demanding from a reduced VAT (10%) to authorisations to drive in the HOV lane and resident areas.

However, and until this law comes into existence in Spain, which is not unlikely but, certainly, will rise to discussion and argument, it is just mere assumptions and claims.

So far, the only thing that we can be sure of is the implicit risks of the service and that have been empirically demonstrated in many cases. At this point it is where the insurance industry must try to answer and give solutions to this current issue. Therefore, there are several insurance companies that have jumped into a relatively unexplored market in Spain in order to try to take their market niche with entirely new policies which we are going to analyse below.

As it is well known, the Spanish Royal Legislative Decree 8/2014 which approved the rewritten text of the Motor Vehicles Public Liability and Insurance Act provides in articles 1 and 2 that it is conditio sine qua non to underwrite an insurance for every “motor vehicle normally based in Spain, that covers, up to the maximum amount of the mandatory insurance, the compulsory liability insurance”, i.e.: covering damages caused to third parties in the event of an accident.

On this, the vehicles belonging to any carsharing company are no exception. While it is true that almost every carsharing company has taken out a fully comprehensive risk insurance covering the damages suffered by the user, the used vehicle or third parties, either material or personal, most of those insurances have an excess. This means that, up to a certain amount (usually around 500 euros) the expenses for the caused damages are borne by the user. Nevertheless, we find in the market some companies that offer the possibility to avoid the excess paying 1-euro supplement in the final trip price, which is an option that we, at Belzuz Abogados S.L.P. Insurance Law Department, suggest hiring whenever it’s provided.

Still, and even though the industry companies have taken out, as we have already said, a fully comprehensive risk insurance, we should not deceive ourselves. It is usual that, within the covers automatically underwritten when checking in, some guarantees, which are part of any fully comprehensive risk insurance, are not available for the user

Among them, we find road assistance, legal counselling or theft of luggage inside the vehicle. In the most common case, the former, the cost would amount to 50 euros per year in most cases. Albeit, there are many insurance companies that in the past years have jumped into covering, through additional covers, those voids in most insurance policies of the carsharing companies.

Conclusion

Therefore, at Belzuz Abogados S.L.P., as insurance law specialists, we would like to report some suggestions that will be very helpful when using carsharing services: before using any car from one of these companies, to check the extent of the coverage covering the driver and choose one meeting your needs; to hire, whenever it is offered, the supplement to avoid the excess; to check the vehicle before using it and report any found flaws. Thus, no flaws made by previous drivers will be charged to you. And, in the event of mishap, approach an expert that may advise you on how to defend yourself against a claim arising from it.

José Temes Mosquera  José Temes Mosquera

 

Belzuz Abogados SLP

La presente publicación contiene información de carácter general sin que constituya opinión profesional ni asesoría jurídica. © Belzuz Abogados, S.L.P., quedan reservados todos los derechos. Se prohíbe la explotación, reproducción, distribución, comunicación pública y transformación total o parcial, de esta obra, sin autorización escrita de Belzuz Abogados, S.L.P.

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