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Amendment to New Pennsylvania Law Sets Ground Rules on Insurance for Peer-to-Peer Car Rentals

insurance label on folder in drawerSenate Bill 1222, which went into effect on July 11, sets new ground rules on insurance for vehicles used in peer-to-peer carsharing programs. The new law includes an amendment that requires additional insurance to help protect third parties who get injured in peer-to-peer carsharing crashes.

The goal of the amendment is to help prevent third parties from being left without coverage when the vehicle owner’s policy excludes coverage for business activities.

However, litigators were surprised with the way the Senate bill became law. They also have questions about whether the law goes far enough to protect crash victims.

Schmidt Kramer partner Scott Cooper was critical of the process because trial lawyers did not have any input. “If there was a hearing there could be some discussion or negotiations.”

Some of the litigators who were contacted by The Legal Intelligencer for comment did not realize the new law had already taken effect.

The bill was passed along party lines, as 22 Republicans voted for it while 15 Democrats voted against it. A spokeswoman for the Democratic chair of the House Appropriations Committee said Democrats voted against it because of the process. The amendment was added at the last minute and was not vetted or even voted on by the committee, which is the normal process.

Cooper is concerned the new law does not deal with minutia that could spring up. For example, how will this law apply if the covered vehicle is not owned but leased? The law does not offer guidance on premiums for this insurance.

Kila Baldwin, the incoming president of the Pennsylvania Association for Justice, was critical of the fact the new amendment only requires minimum coverage. These coverage minimums have stayed the same for more than four decades.

The amendment gives insurance companies the ability to exclude coverage if the policyholder rents the car out. The renter will be forced to use peer-to-peer insurance, which may not be enough.

Many of the issues that may come up with these changes will probably be resolved in the courts.

Legislators have been aiming to create parameters for peer-to-peer carsharing for more than one year. That is why Senate Bill 548 was introduced in April 2021. This bill is very similar to the one that just became law.

According to attorney Bryan Shay, the goal of these legislative efforts was to try to make carsharing companies more like car rental companies and provide more protection for vehicle owners, drivers and third parties.

Injured in a Peer-to-Peer Car Rental Crash? Call Schmidt Kramer

If you were injured in a Pennsylvania car crash, our Harrisburg-based vehicle collision attorney may be able to help you seek full compensation for your damages at no upfront cost to you. We have been securing millions for victims of many car crashes for decades.

Have legal questions? Give us a call today: (717) 727-2089.