California Assembly Bill AB1871 Amended / Bill

 BILL NUMBER: AB 1871AMENDED 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).