Have you ever considered renting out your car for a few extra dollars a month? Even if the thought did occur to you at some point, your new venture plans were likely stalled by thoughts of illegalities and the threat of skyrocketing car insurance rates. But for residents of California, the passing of new car insurance laws have made this unique entrepreneurial idea a possibility.
Thanks to a law which went into effect in January of 2011, vehicle owners in California can now keep their insurance and rent out their vehicles without fear that damages won’t be covered by their car insurance policy. The idea, which was pushed into action by Sunil Paul, CEO of Spride Share, a company that runs checks on the driving records and driver licenses of car renters, is one that was easily enacted into law because of its universal political appeal. Democrats loved the idea because car sharing means less vehicles on the road, which has a beneficial impact on the environment. Republicans loved the idea because of its inherent entrepreneurial implications. Similar peer to peer car rental companies have appeared elsewhere, most recently in Boston, Massachusetts, where RelayRides has been pairing cars with customers.
Regardless of what the insurance companies themselves think of the new California law, it’s obvious that both car owners and renters stand to benefit. People who live in large and expensive cities like San Francisco can help subsidize their residency by renting their vehicles, and renters can take advantage of lower car rental rates than those offered by the large rental companies.
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