Florida’s new statute creates special liability protections and added insurance requirements for the quickly growing peer-to-peer car-sharing industry. It took effect Jan. 1 and applies to both the peer-to-peer car-sharing vehicle owner and the car-sharing program. The statute could mean major changes for ride-share programs and their insurers.
Florida’s Strict Liability Laws’ Impact on Peer-to-Peer Car-Sharing
Under this statute, “peer-to-peer car-sharing” is defined as the authorized use of a motor vehicle by a person other than a shared vehicle’s owner through a car-sharing program that connects motor vehicle owners with drivers for financial consideration. In Florida, however, owners must always be weary of authorizing someone else to use their motor vehicle because of the wide reach of the dangerous instrumentality doctrine. Exclusive to Florida, this doctrine puts strict vicarious liability on a vehicle owner for the negligent actions of those allowed to operate their vehicle, subject to a few exceptions.
How the New Statute Limits Owner and Company Liability
The new statute exempts both the shared vehicle owner as well as the car-sharing program from vicarious liability in line with the federal Graves Amendment and any state or local laws that impose liability solely based on vehicle ownership. This includes Florida’s dangerous instrumentality doctrine. The Graves Amendment provides that a motor vehicle owner who rents or leases the vehicle to someone else will not be held vicariously liable for the user’s actions so long as both of these factors are met:
- The owner is engaged in the trade or business of renting or leasing motor vehicles.
- There is no negligence or criminal wrongdoing on the part of the owner.
In 2005, the Graves Amendment was passed in large part to protect rental car and leasing companies from damages or injuries caused by the multitude of renters who use their vehicles. Similar to the Graves Amendment, Florida’s new statute may open the door to continued growth in the car-sharing industry by granting a broad liability exemption from its longstanding dangerous instrumentality doctrine.
The statute also requires that the peer-to-peer car-sharing program ensure that the vehicle owner and the shared vehicle driver have a motor vehicle insurance policy. The policy must provide all of the following during the car-sharing period:
- Property damage liability coverage in the amount of at least $10,000 as required under Section 324.022, Florida Statutes
- Bodily injury liability coverage in the amount of at least $10,000 for bodily injury to, or death of, one person in any one crash or in the amount of at least $20,000 for bodily injury to, or death of, two or more persons in any one crash as specified in Section 324.021(7)(a) and (b), Florida Statutes
- Personal injury protection benefits in the amount of at least $10,000 for medical and disability benefits and in the amount of at least $5,000 for death benefits required under Section 627.736, Florida Statutes
- Uninsured and underinsured vehicle coverage in the amount equal to bodily injury limits as required under Section 627.727, Florida Statutes
These insurance requirements may be met by a motor vehicle insurance policy maintained by either the shared vehicle owner, the shared vehicle driver, the car-sharing program, or a combination of the three.
As a result of this statute, car-sharing companies and their insurers must be aware of the unique protections that will provide liability boundaries for both the shared vehicle owners and the car-sharing programs – which is a large step outside of Florida’s well-established dangerous instrumentality doctrine – and the added insurance requirements for the parties involved in these transactions.