Sharing your car for profit? Insurance Companies frown?

Sharing cars in one way or another has grabbed quite a few headlines lately. From iPhone apps that help you line-up carpooling buddies to private companies that find vehicles available for use, several options exist to help you either find a ride or share your vehicle with someone else. All of these programs are great, but when it comes down to the simplest method of car sharing, handing the keys over to someone in return for cash, the law frowns.

You see, insurance companies don't like this idea of offering up your car to someone else for dough. In fact, they can legally deny coverage of your vehicle if you do so. Current laws In California, and many other states, prohibit the private rental of your vehicle to somebody else, but that could change soon. A bill (AB 1871) written up by Assemblyman Dave Jones (D-Sacramento) aims to change the state's car insurance laws to allow personal vehicles to be rented out without the risk of losing insurance.

You may be wondering why anyone would want to rent out their ride to a stranger. It makes sense if you look at a heavily congested city like San Francisco (pictured). Many residents of the Bay Area do not own personal vehicles and must rent one for trips outside of the city limits. On the flip side, people who do own vehicles rarely use them. In situations like this, private car sharing could be a perfect answer, if the law allowed it.