BILL NUMBER: AB 1871 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY JUNE 1, 2010
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 private passenger 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
annual revenue received by the motor vehicle's owner
that is generated by personal vehicle sharing does
not exceed the annual expenses of owning and operating the
vehicle, including , but not limited to, 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 and the personal vehicle sharing is conducted p
ursuant to a personal vehicle sharing program .
The bill would define a personal vehicle sharing program as
an a legal entity facilitating
qualified to do business in the state that
facilitates 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 , as specified. The bill would
require a personal vehicle sharing program, among other things,
during all times that the vehicle is engaged in personal vehicle
sharing, to provide insurance coverage, as specified, and collect,
maintain, and make available to the vehicle owner and the vehicle
owner's primary automobile liability insurer verifiable electronic
records identifying the date, time, initial and final locations of
the vehicle, and miles driven when it is being used as part of the
personal vehicle sharing program . 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 solely on the basis that the motor vehicle has
been made available for personal vehicle sharing. Th
e bill would authorize the insurer of the vehicle to exclude any and
all coverage afforded under the vehicle owner's automobile insurance
policy while the vehicle is used by a person other than the owner as
part of a personal vehicle sharing program.
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 any
liability, the vehicle's owner and the private passenger automobile
insurer that insures the vehicle and its owner 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 maintain sufficient insurance coverage to
cover any loss arising out of the use of a privately owned passenger
vehicle during the time when the vehicle is under the operation and
control of the personal vehicle sharing program and, at those times
the personal vehicle sharing program shall stand in the place of the
vehicle owner or the vehicle owner's private passenger automobile
insurer.
SEC. 2. Section 11580.24 is added to the
Insurance Code , to read:
11580.24. (a) No private passenger motor vehicle insured by its
owner pursuant to a policy of insurance subject to Section 11580.1 or
11580.2 shall be classified as a commercial vehicle, for-hire
vehicle, permissive use vehicle, or livery solely because its owner
allows it to be used for personal vehicle sharing as long as all of
the following circumstances apply:
(1) The personal vehicle sharing is conducted pursuant to a
personal vehicle sharing program.
(2) The annual revenue received by the motor vehicle's owner which
was generated by the personal vehicle sharing of the vehicle does
not exceed the annual expenses of owning and operating the vehicle,
including depreciation, interest, lease payments, auto loan payments,
insurance, maintenance, parking, fuel, cleaning, automobile repair,
and costs associated with personal vehicle sharing, including, but
not limited to, the installation, operation, and maintenance of
computer hardware and software, signage identifying the vehicle as a
personal sharing vehicle, and any fees charged by a personal vehicle
sharing program.
(b) For purposes of this section the following definitions apply:
(1) "Personal vehicle sharing" means the use of private passenger
motor vehicles by persons other than the vehicle's owner, in
connection with a personal vehicle sharing program.
(2) "Personal vehicle sharing program" means a legal entity
qualified to do business in the State of California engaged in the
business of facilitating the sharing of private passenger vehicles
for noncommercial use by individuals within the state.
(c) A personal vehicle sharing program shall, for each private
passenger vehicle that it facilitates the use of, do all of the
following:
(1) During all times that the vehicle is engaged in personal
vehicle sharing, provide insurance coverage for the vehicle that is
equal to or greater than the insurance coverages maintained by the
vehicle owner and reported to the personal vehicle sharing program,
but in no event, provide coverage less than three times the minimum
insurance requirements for private passenger vehicles with respect to
liability and uninsured motorist coverage, and provide coverage
equal to or greater than the medical payment coverage and the
physical damage coverage, including collision and comprehensive
coverage, maintained by the vehicle owner and reported to the
personal vehicle sharing program.
(2) Provide the registered owner of the vehicle with a Department
of Motor Vehicles Form REG 5085 or other suitable proof of compliance
with the insurance requirements of this section and the requirements
of the California Financial Responsibility Law in Section 1656.2 of
the Vehicle Code, a copy of which shall be maintained in the vehicle
by the vehicle's registered owner during any time when the vehicle is
operated by any person other than the vehicle's owner pursuant to a
vehicle sharing program.
(3) Collect, maintain, and make available to the vehicle owner,
the vehicle owner's primary automobile liability insurer on file with
the Department of Motor Vehicles, and to any other government agency
as required by law, at the cost of the personal vehicle program,
verifiable electronic records that identify the date, time, initial
and final locations of the vehicle, and miles driven when the vehicle
is under the control of a person other than the vehicle's owner
pursuant to a personal vehicle sharing program.
(4) Provide the vehicle's owner and any person that operates the
vehicle pursuant to a personal vehicle sharing program with a
disclosure that contains information explaining the terms and
conditions contained in this section.
(d) Notwithstanding any other provision of law or any provision in
a motor vehicle owner's automobile insurance policy, in the event of
a loss or injury that occurs during 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), the personal
vehicle sharing program shall be considered the owner of the vehicle
for the purpose of Section 17151 of the Vehicle Code and any losses
shall be borne solely by the personal vehicle sharing program.
(e) Notwithstanding any other provision of law or any provision in
a motor vehicle owner's automobile insurance policy, while a private
passenger motor vehicle is used by a person other than its owner
pursuant to personal vehicle sharing facilitated through a personal
vehicle sharing program, the insurer of that vehicle on file with the
Department of Motor Vehicles may exclude any and all coverage
afforded pursuant its policy.
(f) No policy of insurance that is subject to Section 11580.1 or
11580.2 shall be canceled, voided, terminated, rescinded, or
nonrenewed solely on the basis that the private passenger motor
vehicle has been made available for personal vehicle sharing pursuant
to a personal vehicle sharing program.
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.
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 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).