Turo Car Rental and Insurance

In our constantly changing society, it seems like we are introduced to something new every day. Lately, new developments have been geared toward convenience. Whether it’s renting a home for a weekend instead of booking a hotel or ordering takeout right from your phone instead of driving to the restaurant, many aspects of our lives have become more convenient thanks to new apps and services.

One of these new developments is Turo Car Rental, which is described as “The world’s largest car-sharing marketplace.” Users can either be a “host” or a “guest” on the app/website. Hosts list their vehicles on Turo’s app/website and are made available for guests to rent for a period of time. Many people are classifying it as an Airbnb for cars, and it has been growing in popularity since the pandemic.

Whether you’ve used Turo before or not, it is important to know the insurance side of the service. We’ll take a look at both sides of the transaction – host and guest. Both sides are offered insurance coverage through Turo, the question is should they accept the coverage?

Host

If you remember from previous newsletters, there is a significant difference between personal auto insurance and commercial auto insurance. Personal auto insurance will not cover commercial use of a vehicle. In the case of the Turo “host,” they are renting out their vehicle in exchange for payment which is considered commercial use of a vehicle. A personal auto insurance policy DOES NOT cover the host’s vehicle while it is being rented out through Turo.

Turo does offer various insurance plans for host vehicles. It is highly recommended that hosts opt-in to this coverage in case the guest does not. If both the host and guest opt out of the coverage, damage to the host’s vehicle and any damage/injuries to other parties may not be covered.

Guest

While the guest in this circumstance is renting a vehicle, it is important to note the difference between renting a car through a fleet (ex: Enterprise) and renting a car through a peer.

If you currently have active car insurance and rent a car in the US through a fleet service such as Enterprise, Hertz, Avis, etc., the current coverage on your car insurance extends to the rental car. You may also have some coverage through a credit card provider (assuming you use the credit card to pay for the rental car).

Using Turo is essentially renting a car through a peer. In this case, regardless of if you have active car insurance or not, a personal auto insurance policy may not extend to a car rented through Turo. Your credit card provider most likely has an exclusion in this circumstance as well.

Turo also offers insurance plans for guests. It is highly recommended guests opt into this coverage to cover their liability and the physical damage to the host’s vehicle as well. In most cases, the guest’s insurance is primary, which could result in a difficult situation should the guest decline coverage.

The Big Picture

In the grand scheme of things, Turo makes a lot of sense as it is another service that makes an often-grueling process of renting a car more convenient. However, when using this new service, it is extremely important to know all the risks and make sure you are not potentially leaving yourself in harm’s way without knowing. In any situation like this one where you may question or even assume that you are covered, it is always a smart idea to give your local CRG agent a call to get clarification. Having a trusted agent, you can depend on has tremendous value in this situation and countless others where you need an expert opinion to provide peace of mind.