Press Release

For Immediate Release: May 15, 2013

State of New York | Executive Chamber
Andrew M. Cuomo | Governor


DFS Warns Consumers That Insurance Offered through RelayRides is Illegal and Inadequate, Putting the Public at Risk

DFS Demands Additional Information from RelayRides, Hudson Insurance Company as Part of Widening, Ongoing Investigation

NEW YORK, NY – Benjamin M. Lawsky, Superintendent of Financial Services, today ordered the car-sharing service RelayRides to cease and desist its repeated false advertising and violations of insurance law, which are putting the public at risk. Until further notice, the company has agreed to no longer conduct business in New York State.

The New York State Department of Financial Services (DFS) also issued a ‘consumer alert’ warning New Yorkers that the insurance offered by RelayRides through Hudson Insurance Company is illegal and inadequate, which could leave consumers personally financially liable for an accident. Additionally, as part of its widening, ongoing investigation, DFS demanded additional information from RelayRides and Hudson Insurance Company to help determine the full extent of the violations and any penalties that DFS may impose.

Superintendent Lawsky said: “RelayRides sold New Yorkers a false bill of goods. Despite RelayRides’ assurances to the contrary, their New York customers could get left holding the bag financially for an accident because the company’s insurance is illegal and inadequate.”

RelayRides is a peer-to-peer car-sharing service that allows people to rent out their vehicles to third parties in exchange for a fee. The company represents to New Yorkers that they will not be liable for out-of-pocket expenses in the event that the car is stolen or involved in an accident. However, DFS’s ongoing investigation uncovered that those claims were not true and that New Yorkers could be held personally liable for property damage, theft, bodily injury, or death that occurs during the rental.

In a typical RelayRide rental transaction, the company maintains a $1 million liability insurance policy for injury or damage to third parties. The policy is issued by Hudson Insurance Company – a New York insurer. RelayRides also says it will directly reimburse vehicle owners for physical damage to the vehicle at RelayRides’ discretion.

RelayRides tells vehicle owners that the Hudson liability policy will cover the owner, and that the owner’s own policy will not be involved if there is an accident while a person is renting the vehicle.  However, an owner’s personal liability insurance policy provides coverage to any person who drives the vehicle with the owner’s permission. New York law does not permit an insurer to exclude coverage for a renter. As a result, an owner may be personally liable for any accident that occurs while the vehicle is being rented.

Additionally, RelayRides advises renters to display Hudson ID cards in the event of an accident.  In the event of an accident, however, New York law requires a vehicle operator to show a police officer and the other party involved in the accident the owner’s insurance ID card.  Moreover, if the owner’s primary car insurer does not receive timely notice of the claim, then their insurer may not cover the damage, leaving the owner at greater risk of being personally financially responsible.

RelayRides also represents to vehicle owners that their participation in the program will not result in their personal liability insurers cancelling or not renewing their personal liability insurance. However, renting a personal vehicle may violate the terms an owner’s personal liability policy, entitling their insurer to cancel or not renew the policy.

DFS entered into an agreement with RelayRides for that company to cease and desist its false advertising and repeated violations of insurance law.

DFS’s investigation into RelayRides is ongoing. Today, DFS demanded additional information from RelayRides on the company’s insurance, marketing, and corporate practices. DFS also today sent a Insurance Law Section 308 letter – which is a request for information to which insurers are legally required to respond – to Hudson Insurance Company demanding information on any business they are conducting with RelayRides. This information will help DFS determine the full extent of violations related to RelayRides New York business and any penalties DFS may impose.


Additional news available at
New York State | Executive Chamber | [email protected] | 518.474.8418