Peer-to-peer (P2P) vehicle sharing is a form of car rental or sharing service where individuals rent out their personal vehicles to others, typically on a short-term basis. Unlike traditional car rental companies, where vehicles are owned and managed by the company itself, P2P vehicle sharing platforms connect vehicle owners directly with renters through an online platform or mobile app.

How it generally works:

  1. Listing vehicles: Vehicle owners list their cars on the platform, providing details such as make, model, availability, and rental pricing.
  2. Finding and booking: Renters browse available vehicles on the platform, select the one that suits their needs, and book it for a specific period, often paying through the platform.
  3. Key Exchange: Depending on the platform, they key exchange may happen in various ways. Some platforms use keyless entry systems on lockboxes, while others require a physical key handover between the owner and renter.
  4. Usage and Return: The renter uses the vehicle for the agreed-upon period, and then returns it to the owner. Typically, the vehicle should be returned in the same condition it was rented out, and any additional charges for damages or excess mileage may apply.
  5. Review and Feedback: After the rental period, both the owner and the renter may leave reviews and ratings for each other, helping to build trust within the platform’s community.

Peer-to-peer vehicle sharing offers several benefits, including:

Cost Savings: Renters often find P2P sharing to be more affordable than traditional car rental services.

Convenience: With P2P sharing, renters can often find vehicles available in their local area, providing more convenient access to transportation.

Choice: P2P platforms often offer a wide variety of vehicles, allowing renters to choose the one that best fits their needs, whether it’s a compact car for city driving or a larger vehicle for a family trip.

However, there are also challenges and considerations, such as insurance coverage, vehicle maintenance, and trust between owners and renters. Many P2P sharing platforms address these concerns through insurance policies, verification process, and user reviews.

Are You Covered as a Host?

A reality that is oftentimes overlooked is the fact that if you offer your car to someone on a P2P app, most personal auto policies will not cover the vehicle while it’s being used in a car sharing program.

Insurance companies believe that the risk is far too great to cover on a personal auto policy. Reasons include:

  • Driving records or renters are unpredictable
  • Drop-off and pick-up locations can add risk

Renters may be unfamiliar with an area, which may increase the risk of accidents.

Are You Covered as a Renter?

If you rent a car using a P2P platform and are involved in an accident, you may run into some complications. Your own auto policy will cover you when you rent a car for personal use, but if you do so through a rental agency or a P2P platform, coverages may not be as broad as the coverages listed on your own personal auto policy.

Scenario 1: You rent and do not opt for additional coverage.

If you rent a vehicle while you’re on vacation and choose to not have additional insurance coverage through the P2P platform, typically the broadest coverages that you’ve selected for your own vehicle transfer to the rental vehicle, including deductibles, liability, comprehensive and collision options.

If you’re involved in an auto accident in a P2P vehicle and only have liability coverage, you could be responsible for damage to the P2P rental. The coverage limits that you’ve selected on your own policy also apply, so if your limits are less than the damages, you could be responsible for the difference.

Scenario 2: You rent and you choose coverage through the P2P company.

This is more risky because the insurance coverage that is offered through the P2P company many not be sufficient enough to fully cover you in the event of a claim. It’s best to speak with one of our licensed professionals. They can advise you on the best option for you.