BILL NUMBER: AB 1871	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MAY 11, 2010
	AMENDED IN ASSEMBLY  APRIL 28, 2010

INTRODUCED BY   Assembly Member Jones

                        FEBRUARY 12, 2010

   An act to add Section 11580.24 to the Insurance Code, relating to
motor vehicle insurance coverage.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1871, as amended, Jones. Motor vehicle insurance coverage:
personal vehicle sharing.
   Existing law prohibits an insured motor vehicle from being
classified as a common carrier, livery, or for-hire vehicle solely
for the reason that the named insured is performing volunteer
services for a nonprofit charitable organization or governmental
agency consisting of providing social service transportation, as
defined.
   This bill would prohibit a motor vehicle from being classified for
insurance purposes as a commercial, for-hire, or permissive use
vehicle, or livery solely on the basis of it being used for personal
vehicle sharing, as defined, if the revenue generated by personal
vehicle sharing does not exceed the annual expenses of operating the
vehicle, including depreciation, interest, lease payments, auto loan
payments, insurance, maintenance, parking, and fuel, provided that
motor vehicle insurance coverage is provided by the personal vehicle
sharing organization for the period when the vehicle is being used by
a person other than the owner.
   The bill would define a personal vehicle sharing program as an
entity facilitating personal vehicle sharing and providing automobile
liability insurance coverage for a privately owned motor vehicle, as
prescribed, when it is being used by a person other than the owner.
The bill would limit the circumstances under which the motor vehicle
owner's liability insurance can be subject to liability, and require
that automobile insurance policies not be canceled, voided,
terminated, rescinded, or nonrenewed on the basis that the motor
vehicle has been made available for personal vehicle sharing.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    The Legislature finds and declares all
of the following:  
   (a) It is the intent of the Legislature in enacting this bill that
during the time when owners of motor vehicles make their vehicles
available to, and those vehicles are under the operation and control
of, a personal vehicle sharing program's member, if an incident,
accident, or occurrence happens that gives rise to a claim of
liability, property damage, medical payments, or uninsured or
underinsured motorist claim, the vehicle's owner shall be held
harmless, and the private passenger automobile insurer that insures
the vehicle and the owner, and any personal liability umbrella policy
insurer in connection with required underlying insurance, shall be
held harmless with no obligation to defend or indemnify the motor
vehicle's owner.  
   (b) It is the further intent of the Legislature that a personal
vehicle sharing program shall maintain sufficient insurance coverage
to cover any loss, and in the event of any assertion that the vehicle
owner, the owner's private passenger automobile insurer, or personal
liability umbrella policy insurer in connection with required
underlying insurance, has any liability or coverage obligations with
respect to any incident, accident, or occurrence that occurs while
the vehicle is being used in the personal vehicle sharing program,
the personal vehicle sharing program shall stand in the place of the
vehicle owner. 
   SECTION 1.   SEC. 2.   Section 11580.24
is added to the Insurance Code, to read:
   11580.24.  (a) No motor vehicle insured by the owner pursuant to a
policy of insurance issued under Section 11580.1 or 11580.2 shall be
classified as a commercial vehicle, for-hire vehicle, permissive use
vehicle, or livery solely on the basis of it being used for personal
vehicle sharing if the revenue generated by personal vehicle sharing
does not exceed the annual expenses of operating the vehicle,
including depreciation, interest, lease payments, auto loan payments,
insurance, maintenance, parking, and fuel, provided that motor
vehicle insurance coverage is provided by the personal vehicle
sharing organization for the period when the vehicle is being used by
a person other than the owner.
   (b) For purposes of this section "personal vehicle sharing" means
 the sharing of  privately owned motor vehicles that are
allowed to be used by persons other than the vehicle owner, as part
of a communal pool of motor vehicles.
   (c) For purposes of this section a "personal vehicle sharing
program" is an entity that facilitates personal vehicle sharing and
does all of the following:
   (1) Provides automobile liability insurance coverage for privately
owned motor vehicles, when used by persons other than the vehicle
owner, with policy limits that are equal to or greater than those
maintained by each vehicle owner, that, in no event, totals less than
three times the minimum liability insurance requirements for private
passenger vehicles as prescribed under subdivision (b) of Section
11580.1, and that satisfies the requirements of the California
Financial Responsibility Law in Section 1656.2 of the Vehicle Code.
   (2) Provides the motor vehicle owner with a Department of Motor
Vehicles Form REG 5085 or other suitable proof of insurance
sufficient to comply with the proof of insurance requirements of the
California Financial Responsibility Law in Section 1656.2 of the
Vehicle Code.
   (3) Collects and maintains verifiable electronic records that
identify the date, time, and location when a vehicle is placed under
the control of a person other than the vehicle owner in order to
establish the moment in time when the automobile liability insurance
provided by or though the personal vehicle sharing program is in
effect and when the insurer of the owner's vehicle is not subject to
liability pursuant to subdivision (d).
   (d) Notwithstanding any other provision of law or any provision in
a motor vehicle owner's automobile insurance policy, the motor
vehicle owner's insurer shall not be subject to liability under any
circumstances for any loss or event that occurs during  the
  any  time period when the vehicle is under the
operation and control of a person  ,  other than the
vehicle owner  ,  pursuant to a personal vehicle
sharing program, as determined pursuant to paragraph (3) of
subdivision (c), and any losses shall be borne solely by the personal
vehicle sharing program and its insurer.
   (e) No policy of insurance issued under Section 11580.1 or 11580.2
shall be canceled, voided, terminated, rescinded, or nonrenewed on
the basis that the insured motor vehicle has been made available for
personal vehicle sharing, provided that the privately owned vehicle's
insurer shall be afforded the protections under subdivision (d).