 |
 |
 |
|
Coverage Concerns Car pooling Financial concerns often spur the pooling of individuals’ transportation resources By Roy C. McCormick The use of car pools or ride-sharing arrangements has increased as the cost of gasoline and other auto-related expenses have risen. Workers in the same office or plant make such arrangements, as do neighbors who work at different locations. They take turns driving or regularly ride in one car and pay the owner a reasonable sum, which contributes to the cost of gas, maintenance and wear and tear. Parents frequently band together into driver groups so that their home and work duties need not be geared to running a daily school transportation service for their children. Four or five mothers may alternate driving responsibility, not only to school classes but also to sports activities and other after school functions. Students drive classmates back and forth between home and school. Agents, brokers, customer service representatives and others on whom insureds depend for protection are well advised to become familiar with the exposures created by car pool arrangements, as well as how insurance will respond. Personal auto liability coverage does not apply to “any automobile while being used as a public or livery conveyance.” Language differs in policies written by the various insurers, but the intent is the same. By dictionary definition “a public conveyance is a vehicle used indiscriminately in conveying the public without being limited to certain persons or occasions.” A livery vehicle is “offered for rent.” Courts have held that reasonable expense sharing agreements do not constitute use of an automobile as a “public or delivery conveyance.” Guidelines for furnishing information to insureds can be developed by applying the pertinent policy provisions to the various ride sharing practices. Cases in point The case of Allstate Insurance Company v. Roberson, 5 CCH (Auto 2nd.) 389, is considered a leading one in the application of automobile liability insurance to circumstances under review. The court held that expense sharing agreements do not constitute use of the automobile as a “public or livery conveyance.” Other courts have interpreted the policy language in a similar fashion. The Insurance Information Institute, which is interested in a proper public understanding of these matters, affirms that a ride-sharing arrangement does not void automobile liability insurance or medical payments coverage, provided that it is not conducted for profit. Governments at all levels are supportive of measures that contribute to the reduction of the number of vehicles on streets and highways. In addition, many employers, especially in metropolitan areas, are cooperating with city officials to reduce rush hour traffic by encouraging their employees to double up in their commuting. Note, however, that there is a potential for an employer to be liable when car pool or share the ride arrangements for employees are sponsored by or even encouraged by that employer. Special pools organized during public transportation interruption are a case in point. The lawsuit potential is another convincing argument for non-ownership auto liability coverage under an employer’s auto-mobile insurance. Occasionally a car pool member will drive a vehicle supplied and operated that day by another member of the group who desires to take a brief break from driving. Concerns may rise over the car owner’s automobile liability and medical payments insurance. Policy provisions make clear that both the relief driver, driving with the car owner’s permission, and the owner are covered under those circumstances. Those who provide automobile insurance and advise insureds on their coverage and needs should review the car pool exposure and the manner in which insurance applies. Ready answers to questions are essential, but this is a situation that warrants taking the initiative and bringing it to the attention of the insured. Good customer service and relations! In summary, the intent of the insurance protection is to exclude coverage for losses involving vehicles “used to carry persons or property for a fee,” followed by an exception for “shared expense car pools.” The language of the exception must be taken literally. Payments by passengers must be limited to a fair share of the actual cost of vehicle use and should not include profit for the car owner. Substantial automobile liability and medical payments are clearly needed by persons participating in car pools and, certainly, by those who are the only drivers and with whom the passengers share expenses. * The author |
|
|||||||||||||
| ||||||||||||||
