Insuring your car as a Turo owner? What to know

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Insuring your car as a Turo owner? What to know

If you’ve considered ways to earn extra money with your vehicle, you’ve probably considered driving for companies like Lyft or Uber. But you can also use your vehicle, a second vehicle (or even a fleet!) to earn passive income.

Billed as the AirBnB of car rental, Turo is an online service that connects vehicle owners with drivers who want to rent their rides. Turo has been around since 2009 when it started out as a car-sharing service called RelayRides. Today, Turo has 4,500 cars in cities around the world and at 300 airports. It allows car owners to rent out their vehicles by the hour, day, week or however long they feel like.

Renters and owners seem to love the service (disclosure: we haven’t actually tried Turo as a renter or owner, so we can’t speak to how well it works), but we wondered: What are the implications for car insurance, particularly for the Turo vehicle owners?

We contacted Turo to find out.

Turo’s Standard, Basic & Premium policies

“We have three different Turo-provided protection plans for hosts: standard, basic and premium,” said Christin Di Scipio, a Turo spokesperson. “Hosts are able to set up their vehicles with the insurance level of their choice and the fee is subtracted from the total trip cost, so the hosts are not paying anything out of pocket for insurance.”

The policy costs differ depending on the insurance plan owners choose, but they range from 15% to 35% of the total trip cost. To qualify for these policies – or even for being a Turo owner – you’ll go through a background check, possibly including your personal/business credit report and/or insurance credit report, and even a background check, including a criminal background check, all where applicable by law. It’s all in accordance with the Fair Credit Reporting Act, consumer reporting laws and other relevant laws, Turo’s terms of service page says.

The policies provide $1 million in combined, single-limit-per-occurrence coverage for owners for bodily injury and property damage to third parties during the rental period. So, if your renter injures someone or causes damage to someone else’s property, you’re covered up to $1 million. You’ll also get liability coverage during the delivery period. (If you've confused by all the jargon, we've got more details on how car insurance works here.)

Interior & exterior damages

But what if the renter damages your car in some way? Say they hit a rock wall. Turo policies will provide physical damage protection covers up to the actual cash value of the car (capped at $125,000) for any event that qualifies as a covered peril during the rental period.

“The exception is the Tesla model X and model S,” Di Scipio said. “Turo will provide coverage up to the actual cash value of these cars with no other limit.”

When it comes to other damages – say the renter badly scratches your rear bumper loading or unloading items from the trunk, Turo’s coverage depends.

“For vehicles on the premium plan, Turo provides coverage for exterior wear and tear,” Di Scipio said. “Turo does not offer coverage for exterior wear and tear for owner vehicles on the standard or basic plans.”

Interior wear and tear is not covered under any protection plan, though. So if your renter dumps their pumpkin spice latte all over your dashboard, it’s up to you to clean it up.

“We do, however, allow hosts to request reimbursement from travelers for cleaning fees, so in a scenario where a traveler leaves the interior of the car a mess, the host can be reimbursed from traveler for cleaning fees,” Di Scipio said.

The bottom line

If you want to rent out your car or even a few cars through Turo, it’s important to do your research. It’s a good idea to start by comparing Turo’s coverage options with some commercial policies in order to ensure you’re comfortable with how you’re protecting your vehicle or vehicles. And keep in mind that your standard auto insurance policy most likely won’t cover your renters. Your independent insurance agent should be able to answer all your questions and provide you with all the details you need to ensure you’re well covered.

Driving for Uber or Lyft? We've got everything you need to know about ride-share insurance here.

Image: ardaguldogan