RelayRides- A New Automobile Sharing Programs are a Gamble
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If parents loan the family car to their child, they can be sued if an accident
occurs. The same goes for anyone who loans a car to a friend in need.
So, what happens when a third party like RelayRides is involved?
RelayRides is a peer-to-peer car rental or car-sharing service that went
nationwide in March this year after launching in Boston in 2010. Many
participants loan their cars as a good deed to open up parking along busy
urban streets, promote environmentally sound habits or simply to help
those in need of a ride. Most, however, opt to rent their vehicles for
a variable rate – usually about $10 per hour.
“Every car loaned or rented through the program gets $1 million
in liability insurance coverage from RelayRides, but even that may not
be enough,” says Hillel L. Presser, a lawyer specializing in asset
protection planning and author of Financial Self-Defense (www.assetprotectionattorneys.com).
“When there’s an accident involving serious injuries, the
victims simply have no choice but to sue for at least $1 million, and
often more. If you rented the car and you have assets, you could become
Earlier this year, a man who rented a car through the program was killed
in an accident while driving the wrong way on a highway, Presser says,
citing a New York Times report. Four people in the car he hit were seriously injured.
“Medical expenses are expected to exceed RelayRides’ insurance
coverage,” Presser says. “The owner of the car is a part-time
Google systems administrator – which means she probably makes good
money. Who will pay the overage, and who might be sued, is still yet to
In today’s world, lawyers have gotten very creative in what they’ll
go after, which is why comprehensive protection of assets is absolutely
crucial, he says.
Presser offers the following tips:
• Account for ALL of your assets: Not sure of what you have? Don’t
wait for a plaintiff’s lawyer to tell you exactly what that is before
he or she takes it from you. Take stock of valuable domain names, telephone
numbers, intellectual property, potential inheritances, and other non-liquid assets.
• Liability insurance is no guarantee: Buy as much insurance as you
can; it’s cheap and it helps you sleep at night. But realize that
70 percent of claims will not be covered. Your coverage may be inadequate
for a particular suit, and your insurance company may go bankrupt. Having
insurance and an asset protection plan is the belt-and-suspenders approach
for hanging onto your pants.
• Convert non-exempt assets into exempt assets: State laws protect
some personal assets from lawsuits and creditors. Those assets typically
include your primary residence; personal items such as furniture and clothing;
pensions and retirement funds; and life insurance. Find out the exemptions
for your state and convert non-exempt assets, such as cash, into exempt
assets, such as life insurance.
• Transfer your assets to a protective entity: The key to asset protection
is to own nothing while controlling everything. Transfer any non-exempt
assets out of your name to protective entities such as trusts, limited
liability companies, limited partnerships and others.
• Don’t loan out your car – even to your kid: If your
children are going to drive, they should drive cars titled in their name
alone. And if they pay for the cars themselves, you add another layer
of protection. Courts may find that parents who are obviously paying for
their children’s cars liable to some degree, even if the car title
is in the child’s name.
“While everyone can take well-informed steps to further protect
their wealth, there is no substitute for having an experienced legal professional
review an estate – all of it,” Presser says.
YES, YOU CAN LOSE EVERYTHING!
You may think that your wealth is safe and that you don't need protection.
But don't delude yourself and accept reality — for every 60
minutes you spend making money, spend 60 seconds thinking about how to