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AB-1095 Insurance: personal vehicle sharing.(2023-2024)



Current Version: 03/23/23 - Amended Assembly

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AB1095:v98#DOCUMENT

Amended  IN  Assembly  March 23, 2023

CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Assembly Bill
No. 1095

Introduced by Assembly Member Low
(Coauthor: Senator Dodd)

February 15, 2023

An act to amend Section 11580.24 of of, and to add Section 11580.241 to, the Insurance Code, and to amend Section 16056 of the Vehicle Code, relating to insurance.


LEGISLATIVE COUNSEL'S DIGEST


AB 1095, as amended, Low. Insurance: personal vehicle sharing.
Existing law generally regulates classes of insurance, including automobile liability insurance. Existing law prohibits classifying a private passenger motor vehicle as a commercial vehicle, for-hire vehicle, permissive use vehicle, or livery solely because its owner allows it to be shared, if specified criteria are met. Existing law requires a personal vehicle sharing program to provide insurance coverage for the vehicle and driver that is equal to or greater than the coverage maintained by the vehicle owner, but no less than 3 times the minimum coverage amounts for private passenger vehicles.

This bill makes technical, nonsubstantive changes to that provision.

Existing law requires an owner or operator of a motor vehicle, or an owner of a vehicle used to transport passengers for hire not regulated by the Public Utilities Commission, to maintain liability insurance coverage for the named insured and any other person using the vehicle with permission in the amount of $15,000 for the bodily injury or death of any one person, $30,000 for the bodily injury or death of all persons, and $5,000 for damage to the property of others resulting from any one accident. Existing law increases these minimum amounts to $30,000, $60,000, and $15,000, respectively, on January 1, 2025. Under existing law, a violation of these requirements is a crime.
This bill would delete the insurance coverage requirement for a personal vehicle sharing program, and would instead require a personal vehicle sharing program, when a vehicle is engaged in personal vehicle sharing, to provide liability insurance coverage of the same minimum coverage that applies to an owner or operator of a motor vehicle. The bill would require a personal vehicle sharing program to provide the vehicle owner and operator with the ability to purchase additional coverage and to make specified disclosures. A violation of these provisions would make a person liable for a specified civil penalty, and a violation of the requirement to maintain minimum liability coverages would be a crime, thus imposing a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NOYES   Local Program: NOYES  

The people of the State of California do enact as follows:


SECTION 1.

 Section 11580.24 of the Insurance Code is amended to read:

11580.24.
 (a) A private passenger motor vehicle insured by its owner pursuant to a policy of insurance subject to Section 11580.1 or 11580.2 shall not 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 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.
(3) The owner of the private passenger motor vehicle does not knowingly place the vehicle into commercial use, as defined by Section 675.5, by a personal vehicle sharing user while engaged in personal vehicle sharing.
(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.
(3) “Private passenger motor vehicle” means a vehicle that is insured, or is subject to being insured, under a personal automobile liability insurance policy insuring a single individual or individuals residing in the same household, as the named insured, or meets the requirements of Section 16058 of the Vehicle Code, but does not include a vehicle with fewer than four wheels.
(c) A personal vehicle sharing program shall, for each 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 coverages for the vehicle and operator of the vehicle that are equal to or greater than the insurance coverages maintained by the vehicle owner and reported to the personal vehicle sharing program. However, the personal vehicle sharing program shall not provide liability coverage less than three times the minimum insurance requirements for private passenger vehicles. Compliance with the terms and conditions of this paragraph shall be deemed to avoid the application of the limitation on damage recoveries set forth in Section 3333.4 of the Civil Code.

(2)

(1) 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 personal vehicle sharing program.

(3)

(2) Collect, maintain, and make available to the vehicle’s 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 sharing 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.

(5)

(3) Not knowingly permit the vehicle to be operated for commercial use by a personal vehicle sharing user while engaged in personal vehicle sharing.

(6)

(4) Use only private passenger vehicles.

(7)

(5) Facilitate the installation, operation, and maintenance of computer hardware and software and signage, necessary for a vehicle to be used in a personal vehicle sharing program, including payment of the cost of damage or theft of that equipment and any damage caused to the vehicle by the installation, operation, and maintenance of that equipment.
(d) Notwithstanding any other law or any provision in a private passenger 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, or otherwise under the control of a personal vehicle sharing program, the personal vehicle sharing program shall assume all liability of the owner and shall be considered the owner of the vehicle for all purposes. Nothing in this section limits the liability of the personal vehicle sharing program for its acts or omissions that result in injury to any persons as a result of the use or operation of a personal vehicle sharing program.
(e) A personal vehicle sharing program shall continue to be liable pursuant to subdivision (d) until both of the following occur:
(1) The private passenger motor vehicle is returned to a location designated by the personal vehicle sharing program.
(2) The earliest of one of the following occurs:
(A) The expiration of the time period established for the particular use of the vehicle.
(B) The intent to terminate the personal vehicle sharing use is verifiably communicated to the personal vehicle sharing program.
(C) The vehicle’s owner takes possession and control of the vehicle.
(f) The personal vehicle sharing program shall assume liability for a claim in which a dispute exists as to who was in control of the vehicle when the loss occurred giving rise to the claim, and the vehicle’s private passenger motor vehicle insurer shall indemnify the personal vehicle sharing program to the extent of its obligation under the applicable insurance policy, if it is determined that the vehicle’s owner was in control of the vehicle at the time of the loss.
(g) If the owner of the vehicle is named as a defendant in a civil action for 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’s owner pursuant to a personal vehicle sharing program, or otherwise under the control of a personal vehicle sharing program, the personal vehicle sharing program shall have the duty to defend and indemnify the vehicle’s owner, subject to the provisions of subdivisions (d) and (f).
(h) Notwithstanding any other law or any provision in a vehicle owner’s automobile liability 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, all of the following shall apply:
(1) The insurer of that vehicle on file with the Department of Motor Vehicles may exclude any and all coverage afforded pursuant to its policy.
(2) The primary and excess insurer or insurers of the owners, operators, and maintainers of the private passenger motor vehicle used in a personal vehicle sharing program shall have the right to notify an insured that it has no duty to defend or indemnify any person or organization for liability for any loss that occurs during use of the vehicle in a personal vehicle sharing program.
(i) A policy of insurance that is subject to Section 11580.1 or 11580.2 shall not 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 that is in compliance with this section.

SEC. 2.

 Section 11580.241 is added to the Insurance Code, to read:

11580.241.
 (a) A personal vehicle sharing program shall, for each vehicle that it facilitates the use of, do all of the following:
(1) Provide both of the following during all times that the vehicle is engaged in personal vehicle sharing:
(A) Insurance coverages for the vehicle and operator of the vehicle that meet the requirements set forth in subdivision (e) of Section 16056 of the Vehicle Code.
(B) The vehicle owner and operator with the ability to obtain or purchase additional insurance in excess of the minimum mandatory coverage and limits pursuant to subparagraph (A), including comprehensive and collision coverages or protections.
(2) Provide the vehicle owner and any person that operates the vehicle pursuant to a personal vehicle sharing program with a written disclosure of all of the following:
(A) The terms and conditions contained in this section, including any applicable insurance requirements, coverages, coverage gaps, protections, limits, and exclusions.
(B) The minimum mandatory coverage and limits that the personal vehicle sharing program is required to provide to owners and operators pursuant to Section 16056 of the Vehicle Code.
(C) The coverages and limits provided by the personal vehicle sharing program.
(D) That the personal vehicle sharing program is required to provide the vehicle owner and any person that operates the vehicle pursuant to a personal vehicle sharing program with the option to purchase or obtain additional limits, coverages, or protections.
(3) Disclose all of the following in writing to the vehicle owner:
(A) That the vehicle owner may have chosen higher limits, different coverages, or both on their personal automobile insurance policy than those being provided by the personal vehicle sharing program, and, if so, that they have the option to purchase or obtain higher limits, optional coverages or protections, or both to match or exceed their personal automobile insurance.
(B) That their personal automobile insurance may expressly exclude coverage for a vehicle while it is being operated pursuant to a personal vehicle sharing program in accordance with subdivision (h) of Section 11580.24.
(C) That if their personal automobile insurer does not expressly exclude coverage for vehicle sharing, it may still deny coverage for an accident occurring during vehicle sharing if the annual revenue from the personal vehicle sharing program to the vehicle owner exceeds the vehicle owner’s annual expense of owning and operating the vehicle, as provided in subdivision (a) of Section 11580.24.
(b) A person who violates this section is liable to the state for a civil penalty to be determined by the commissioner, not to exceed five thousand dollars ($5,000) for each violation, or, if the violation was willful, a civil penalty not to exceed ten thousand dollars ($10,000) for each violation. The commissioner may establish the acts that constitute a distinct violation for purposes of this section.
(c) A penalty imposed pursuant to subdivision (b) is appealable by means of any remedy provided by Section 12940 or by Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.
(d) (1) If the commissioner has reason to believe that a person has engaged or is engaging in this state in a violation of this section, and that a proceeding by the commissioner would be in the interest of the public, the commissioner shall issue and serve upon that person an order to show cause containing a statement of the charges, a statement of that person’s potential liability under this section, and a notice of a hearing to be held at a time and place fixed in the notice, which shall not be less than 30 days after the service the notice, for the purpose of determining whether or not the commissioner shall issue an order to that person to pay the penalty imposed by subdivision (b) and to cease and desist those methods, acts, or practices that violate this section.
(2) If the charges noticed pursuant to paragraph (1) are found to be justified, the commissioner shall issue and cause to be served upon the person an order requiring that person to pay the penalty imposed pursuant to subdivision (b) and to cease and desist from engaging in those methods, acts, or practices found to be in violation of this section.
(3) The hearing shall be conducted in accordance with the Administrative Procedure Act (Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code), except that the hearings may be conducted by an administrative law judge in the administrative law bureau of the department when the proceedings involve a common question of law or fact with another proceeding arising under this code that may be conducted by administrative law bureau’s administrative law judges. The commissioner and the appointed administrative law judge shall have all the powers granted under the Administrative Procedure Act.
(4) The person shall be entitled to have the proceedings and the order reviewed by means of any remedy provided by Section 12940 or by the Administrative Procedure Act.

SEC. 3.

 Section 16056 of the Vehicle Code, as added by Section 3 of Chapter 717 of the Statutes of 2022, is amended to read:

16056.
 (a) No A policy or bond shall not be effective under Section 16054 unless issued by an insurance company or surety company admitted to do business in this state by the Insurance Commissioner, except as provided in subdivision (b), nor or unless the policy or bond is subject, if the accident has resulted in bodily injury or death, to a limit, exclusive of interest and costs, of not less than thirty thousand dollars ($30,000) because of bodily injury to or death of one person in any one accident and, subject to that limit for one person, to a limit of not less than sixty thousand dollars ($60,000) because of bodily injury to or death of two or more persons in any one accident, and, if the accident has resulted in injury to, or destruction of property, to a limit of not less than fifteen thousand dollars ($15,000) because of injury to or destruction of property of others in any one accident.
(b) No A policy or bond shall not be effective under Section 16054 with respect to any vehicle that was not registered in this state or was a vehicle that was registered elsewhere than in this state at the effective date of the policy or bond or the most recent renewal thereof, unless the insurance company or surety company issuing the policy or bond is admitted to do business in this state, or if the company is not admitted to do business in this state, unless it executes a power of attorney authorizing the department to accept service on its behalf of notice or process in any action upon the policy or bond arising out of an accident mentioned in subdivision (a).
(c) Any nonresident driver whose driving privilege has been suspended or revoked based upon an action that requires proof of financial responsibility may, in lieu of providing a certificate of insurance from a company admitted to do business in California, provide a written certificate of proof of financial responsibility that is satisfactory to the department, covers the operation of a vehicle in this state, meets the liability requirements of this section, and is from a company that is admitted to do business in that person’s state of residence.
(d) On January 1, 2035, the minimum liability coverage shall be increased by twenty thousand dollars ($20,000) for bodily injury or death for one person, by forty thousand dollars ($40,000) for bodily injury or death for all persons, and by ten thousand dollars ($10,000) for property damage.
(e) The insurance coverage requirements of this section, including the minimum liability coverages set forth in subdivisions (a) and (d), apply to personal vehicle sharing programs, as defined in Section 11580.24 of the Insurance Code.

(e)

(f) This section shall become operative on January 1, 2025.

SEC. 4.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.