Understanding Carsharing Risk and Insurance Claims in the United States

Carsharing offers consumers short-term access to vehicles, which facilitates better mobility and reduces the need for personal vehicle ownership. Carsharing does not require consumers to have automobile insurance. Instead, carsharing operators insure their members and are responsible for the risks and liabilities associated with vehicle use. Carsharing operators are burdened with obtaining cost-effective insurance under a usage model that lacks massive actuarial data and analysis. This study analyzes 28 operator years of trips and claims data from six carsharing operators in the United States (U.S.), with data spanning a time range of 2008 to 2015. A total of 328,726 valid trips and 125 valid insurance claims occurred during this period. From this data, we estimate crash risk, measured on per mile and per insured vehicle year basis. We estimate the average cost per insured-vehicle year of carsharing insurance to be US$789 for operators in our study. Substantially heightened risk is observed for older drivers above age 65 compared to other age brackets as well as national averages. Teenage and young adult drivers of ages 18-25, who traditionally have the highest risk, had only moderately higher risk compared to adults, which is likely due to driving experience and clean driving record requirements prior to obtaining membership. Mid-age adults of ages 30-65 had the lowest risk in all measures, as found in nationwide data. However, the actual risk of carsharing vehicles will vary by usage patterns and (other) unobserved factors; actual costs will also vary by insurance policy.