BILL ANALYSIS
AB 1871
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 1871 (Jones)
As Amended August 20, 2010
Majority vote
-----------------------------------------------------------------
|ASSEMBLY: |75-0 |(June 3, 2010) |SENATE: |35-0 |(August 25, |
| | | | | |2010) |
-----------------------------------------------------------------
Original Committee Reference: INS.
SUMMARY : Authorizes private passenger motor vehicle owners to
make their vehicle available for use by a personal vehicle
sharing program (PVSP) without impacting the owners' private
passenger automobile insurance policy.
The Senate amendments :
1)Delete the intent language.
2)Adopt more consistent use of terminology throughout the bill
(consistently using the phrase "private passenger motor
vehicle" and the phrase "personal vehicle sharing program").
3)Add criteria to the required elements to qualify as a PVSP
that an owner not knowingly allow the vehicle to be used for a
commercial purpose.
4)Define "private passenger motor vehicle."
5)Expand the duties of a PVSP by adding a duty to ensure that
there is no commercial use of shared vehicles, and a duty to
install appropriate equipment to monitor the use of the
vehicle.
6)Specify that the PVSP is liable until the vehicle is returned
to a location designated by the owner, and the earliest of:
a) The contracted shared use time,
b) The shared user returns it to the PVSP, or,
c) The owner takes possession of the vehicle.
7)Provide that the PVSP assumes liability in the event of a
AB 1871
Page 2
dispute about whether the vehicle was in use by a PVSP when
the loss occurred.
8)Require the PVSP to defend the vehicle owner in the event that
the owner is named as a defendant in any case where the loss
occurred during PVSP use.
9)Specify that any insurer that insures a vehicle being used in
a PVSP has the right to notify the owner that it will not
defend or indemnify the owner for losses associated with use
of the vehicle in the PVSP.
EXISTING LAW :
1)Requires owners and operators of private passenger automobiles
to maintain "financial responsibility," which usually takes
the form of privately purchased insurance in at least the
amounts per accident of $15,000 per person for bodily
injuries, $30,000 for all bodily injuries, and $5,000 for
property damages.
2)Provides that an insurance policy covering an automobile is
primary in the event the vehicle is involved in an accident
that causes a loss to a third party. For example, if a
vehicle owner allows a friend or relative who is not listed in
the owner's policy to drive the vehicle, and the friend or
relative causes a loss in an accident, the policy covering the
vehicle, and not the friend or relative's policy, is the
primary source for payment of damages.
3)Contains very limited prohibitions on an automobile insurer
from classifying a private passenger vehicle as a commercial
or for-hire vehicle, including use as a volunteer for a
nonprofit organization.
AS PASSED BY THE ASSEMBLY , this bill:
1)Contained declarations of legislative intent that the purpose
of the bill is to hold a vehicle owner, and the vehicle
owner's insurer, harmless for losses that occur while the
vehicle is being used in a car sharing program.
2)Provided that no vehicle insured as a private passenger motor
vehicle in compliance with the Financial Responsibility Law
AB 1871
Page 3
shall be classified as a commercial or for-hire vehicle solely
on the basis of the vehicle being used in a personal vehicle
sharing program, provided that the revenue generated for the
owner does not exceed the expenses of operating the vehicle.
These expenses include lease or loan payments, insurance,
parking, depreciation, fuel, maintenance and costs associated
with the computer hardware and software required by the
vehicle sharing program.
3)Required that the personal vehicle sharing organization
maintain appropriate insurance for the periods that the
vehicle is being used by any driver other than the owner.
4)Defined "personal vehicle sharing" as the use of privately
owned vehicles by drivers other than the owner as part of a
PVSP.
5)Specified that a PVSP is an entity that facilitates personal
vehicle sharing, and that:
a) Provides liability insurance for private vehicles when
used by drivers other than the owner in amounts equal to or
greater than what the owner maintains, but in no event less
than three times the amount required of private passenger
vehicles with respect to liability and uninsured motorist
coverages, and equal to the amounts maintained by the owner
with respect to medical payments and physical damage
coverages;
b) Provides the vehicle owner with appropriate proof of
financial responsibility to satisfy Vehicle Code
requirements;
c) Collects and maintains verifiable electronic records
that identify the date, time and location when a vehicle is
being used by a driver who is not the owner; and,
d) Provides the vehicle owner with a disclosure explaining
the terms and conditions of the personal vehicle sharing
law.
6)Specified that, notwithstanding any other provision of law or
provision of the owner's insurance policy, the owner's
automobile insurer is not liable under any circumstances for
AB 1871
Page 4
any loss or event that occurs during a time when the vehicle
is under the control of a driver who is not the owner pursuant
to a personal vehicle sharing program.
7)Prohibited an insurer from canceling, rescinding, terminating,
voiding, or nonrenewing an owner's automobile insurance policy
due to the owner making the vehicle available for a personal
vehicle sharing program.
FISCAL EFFECT : This bill is tagged nonfiscal.
COMMENTS : According to the author, the Senate amendments are
the continued efforts by proponents and representatives of the
insurance industry to make it crystal clear that the private
insurance on a vehicle is not involved in any way when the
vehicle is put to use by a PVSP. The Author and the insurers
believe that they have achieved this goal, and the insurance
industry is not opposed to the bill.
Analysis Prepared by : Mark Rakich / INS. / (916) 319-2086
FN: 0006763