As peer-to-peer car rental services like Turo continue to grow in popularity, more people are exploring the convenience of renting vehicles from private owners. Whether you’re a car owner looking to make extra money by renting out your vehicle or a renter seeking a more affordable, flexible option, it’s important to understand one key element: car insurance.
Turo car insurance can be a bit different from traditional policies, and if you’re using Turo or planning to, knowing your coverage options is essential for safeguarding both your vehicle and finances.
What is Turo?
For those new to Turo, it’s a platform that operates similarly to Airbnb but for cars. Car owners, or “hosts,” can list their vehicles for rent, and renters, or “guests,” can book them for a specific period. This service has expanded rapidly in recent years, offering a convenient alternative to traditional rental car companies.
However, one crucial question arises for both hosts and guests: What happens if an accident occurs? That’s where Turo’s unique car insurance options come into play.
Turo’s Insurance Plans for Hosts
If you’re considering becoming a Turo host, you’ll need to ensure that your car is properly insured. Turo offers several insurance plans designed to protect your vehicle while it’s being rented. These plans vary in terms of coverage and cost, allowing hosts to choose one that fits their needs and risk tolerance.
Here are the main insurance options for Turo hosts:
1. 60 Plan
- Coverage: The 60 plan offers the most protection but comes with the lowest take-home earnings. Turo will take a 40% cut from your earnings, but you’ll receive $750,000 in third-party liability insurance and coverage for physical damage up to the actual cash value of the car (minus a $0 deductible).
- Pros: Full protection for your car, no out-of-pocket deductible for physical damage.
- Cons: Higher commission fee, which means lower earnings.
2. 70 Plan
- Coverage: This plan provides slightly less coverage but still offers a good balance. Turo takes 30% of your earnings, and you’re covered for third-party liability up to $750,000. Physical damage is covered up to the actual cash value of your car, with a $250 deductible.
- Pros: Still substantial protection for your vehicle with a relatively low deductible.
- Cons: Moderate reduction in earnings.
3. 75 Plan
- Coverage: The 75 plan allows you to keep 75% of your earnings, but with higher deductibles. Turo’s coverage for physical damage has a $750 deductible, and you’ll still have the same third-party liability protection up to $750,000.
- Pros: You keep more of your earnings.
- Cons: Higher deductible for physical damage, which means more out-of-pocket costs in case of an incident.
4. 80 Plan
- Coverage: Hosts keep 80% of their earnings under this plan, but the physical damage deductible increases to $1,625. The same third-party liability coverage applies.
- Pros: Higher earnings retention.
- Cons: Significantly higher deductible.
5. 85 Plan
- Coverage: This plan offers the highest earnings (you keep 85%) but comes with the highest deductible at $2,500. Third-party liability remains at $750,000.
- Pros: Maximum earnings.
- Cons: Very high out-of-pocket deductible.
Third-Party Liability Coverage for Hosts
In all Turo insurance plans for hosts, third-party liability is covered up to $750,000, which means if your car causes injury or property damage during a trip, Turo’s insurance will handle those costs.
Turo’s Insurance Plans for Renters
For guests renting a car, Turo also provides different insurance protection plans. It’s crucial to understand these options to avoid unexpected costs if an accident occurs while you’re driving.
1. Premier Plan
- Coverage: The Premier Plan offers the highest level of protection for renters. It provides up to $750,000 in third-party liability insurance, with no deductible for physical damage to the rented vehicle.
- Pros: No deductible for physical damage, maximum coverage for third-party claims.
- Cons: The Premier Plan is the most expensive option.
2. Standard Plan
- Coverage: This plan is a middle-ground option. You get up to $750,000 in third-party liability protection, but the deductible for physical damage to the car is $500.
- Pros: Lower cost than the Premier Plan, still solid protection for most situations.
- Cons: Out-of-pocket expenses if damage occurs.
3. Minimum Plan
- Coverage: The Minimum Plan is the most affordable insurance option, offering only the state-mandated minimum liability coverage. Physical damage to the car comes with a $3,000 deductible.
- Pros: The least expensive option.
- Cons: Limited coverage for third-party claims and very high deductible for physical damage.
What Happens if You Decline Turo Insurance?
Guests who already have personal auto insurance may choose to decline Turo’s coverage, but this decision comes with its own set of risks. It’s important to check with your personal auto insurance provider to see if your policy covers car rentals through peer-to-peer platforms like Turo.
In some cases, credit card companies offer rental car insurance as a benefit, but this may not extend to Turo rentals. Be sure to confirm all details before declining Turo’s insurance to avoid gaps in coverage.
Commercial Hosts and Insurance
Turo also has a special category for “Commercial Hosts.” These are hosts who use their own commercial rental insurance rather than Turo’s provided plans. This is typically used by businesses that rent out multiple vehicles.
Commercial Hosts are required to provide their own liability insurance and handle claims independently from Turo’s insurance system. This allows them more control but also means taking on more responsibility for handling accidents and claims.
Common Questions About Turo Car Insurance
1. Do I Need Personal Car Insurance if I’m a Host?
- Yes. Turo’s insurance only covers incidents during the rental period. When you’re driving your car outside of Turo, you still need personal insurance to cover your everyday driving.
2. Does Turo’s Insurance Cover Mechanical Issues?
- No. Turo’s insurance does not cover mechanical issues or regular maintenance costs. Hosts are responsible for ensuring their vehicles are in good condition before renting them out.
3. What if a Guest Damages My Car and Doesn’t Report It?
- If a guest returns your car with damage that wasn’t reported, Turo has a claims process in place. Hosts need to inspect their cars promptly after each rental and file a claim within 24 hours.
How to Choose the Right Turo Insurance Plan
The best Turo insurance plan depends on how frequently you plan to rent out your car, the car’s value, and your risk tolerance. If your vehicle is newer or more expensive, opting for a higher-tier plan with lower deductibles might be wise. For hosts looking to maximize profits, the 85 Plan offers the highest earnings but requires a willingness to accept greater out-of-pocket risk.
As a renter, it’s important to consider the same factors: the value of the car you’re renting, the length of your trip, and your existing insurance coverage. Spending a little more on the Premier Plan might save you thousands in case of an accident.
Final Thoughts
Whether you’re a host or a renter, understanding Turo car insurance is critical to ensuring a smooth and financially safe experience. For hosts, selecting the right insurance plan can help you protect your investment while still earning a profit. For renters, choosing the right coverage can offer peace of mind and protect against unexpected expenses.
Navigating the world of peer-to-peer car rental is exciting, but it’s important to stay informed about the insurance implications before hitting the road. Protect your ride, your wallet, and your experience with the right Turo car insurance.