Bill Text: CA AB2743 | 2023-2024 | Regular Session | Amended

California Assembly Bill 2743

Bill Title: Insurance: personal vehicle sharing.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Engrossed) 2024-05-09 - In Senate. Read first time. To Com. on RLS. for assignment. [AB2743 Detail]

Download: California-2023-AB2743-Amended.html

Amended IN Assembly April 10, 2024

CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Assembly Bill

No. 2743

Introduced by Assembly Member Pacheco

February 15, 2024

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

LEGISLATIVE COUNSEL'S DIGEST

AB 2743, as amended, Pacheco. 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, including if the annual revenue received by the vehicle’s owner generated by the personal vehicle sharing of the vehicle does not exceed the annual expenses of owning and operating the vehicle.

This bill would clarify the above condition prohibiting a private passenger motor vehicle from being classified as a commercial vehicle, for-hire vehicle, permissive use vehicle, or livery solely because its owner allows it to be shared, to instead prohibiting that classification if the total annual revenue received by the vehicle’s owner generated by the personal vehicle sharing of the vehicle does not exceed the total annual expenses of owning and operating the vehicle.
Existing law requires a personal vehicle sharing program, for each vehicle that it facilitates the use of, among other things, to 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, but no less than 3 times the minimum coverage amounts for private passenger vehicles.
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.
This bill would require a personal vehicle sharing program to provide, instead, insurance coverages for the vehicle and operator at a minimum of $45,000 for bodily injury or death for one person, $90,000 for bodily injury or death for all persons, and $15,000 for property damage, and, on and after January 1, 2035, to provide liability coverage at least 3 times the minimum insurance requirements for private passenger vehicles. The bill would require a personal vehicle sharing program to disclose to a vehicle owner and any person that operates the vehicle specified information, including the minimum mandatory coverage and limits that the personal vehicle sharing program is required to provide and the coverages and limits provided. The bill would require a personal vehicle sharing program to disclose in writing specified information to the vehicle owner, including that the vehicle owner’s personal automobile insurance may expressly exclude coverage for the vehicle while it is being operated pursuant to a personal vehicle sharing program. A violation of these requirements would make a person liable for a specified civil penalty.

Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO

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) No 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 ~~total~~ annual revenue received by the vehicle’s owner that was generated by the personal vehicle sharing of the vehicle does not exceed the ~~total~~ 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.

(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 ~~provision of~~ 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.

(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) ~~In the event that~~ If the owner of the vehicle is named as a defendant in a civil ~~action,~~ action for a loss or injury that occurs during any time period when the vehicle is under the operation and control of a ~~person,~~ person other than the vehicle’s ~~owner,~~ 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 ~~provision of~~ 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) No 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 ~~the provisions of~~ 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) (i) Insurance coverages for the vehicle and operator at a minimum of forty-five thousand dollars ($45,000) for bodily injury or death for one person, ninety thousand dollars ($90,000) for bodily injury or death for all persons, and fifteen thousand dollars ($15,000) for property damage.
(ii) On and after January 1, 2035, the personal vehicle sharing program shall not provide liability coverage less than three times the minimum insurance requirements for private passenger vehicles set forth in Section 16056 of the Vehicle Code.
(B) The ability for the vehicle owner and operator 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 contractual 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) The requirement that the personal vehicle sharing program 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 or optional coverages or protections.
(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) (1) 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.
(2) The duties and obligations imposed by this act are cumulative with any other duties or obligations imposed under any other law, and shall not be construed to relieve any party from a duty or obligation imposed under any other law.
(c) A penalty imposed pursuant to subdivision (b) is appealable by means of any remedy provided by Section 12940 or by the Administrative Procedure Act (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. The order to show cause shall contain a statement of the charges, a statement of that person’s potential liability under this section, and a notice of a hearing. The hearing shall be held at a time and place fixed in the notice, which shall not be less than 30 days after the service of 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 confirmed by a preponderance of the evidence, 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 the 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 (Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code).