Does My Auto Insurance Cover Car Sharing?
Your car insurance policy probably won't cover an accident while borrowing a car or renting out your vehicle through a car-sharing company, like Turo.
Before signing up, you should call your insurance company to check your coverage. This is especially important if you're renting out your car because your insurance company could cancel your policy or raise your rates if it finds out you're renting out your vehicle.
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Does my insurance cover car sharing?
Many car insurance companies won't cover any damage or injuries you cause while renting from a car-sharing company. Personal car insurance rarely pays for damage to your vehicle while you're renting it out.
Most car sharing services — like Turo, Getaround and Zipcar — include some level of free auto insurance for hosts and renters. However, coverage varies by state, and the limits may not be high enough to cover the full cost of a bad accident.
Car share insurance for hosts
Your personal car insurance policy doesn't usually cover accidents that occur while someone else rents your car.
Some rental companies offer damage protection for an extra fee, which can help pay for damage to your car while a renter is driving it.
Car sharing services typically provide extra liability coverage at no extra cost. This pays for any claims that your personal policy doesn't cover.
For example, Turo hosts automatically get $750,000 in liability insurance from Travelers. Getaround includes $1 million of liability coverage for hosts.
In most states , insurance companies can cancel your policy or raise your rates if you rent your car to another driver with a car-sharing service.
You should always call your insurance company before signing up as a host to make sure it won't cause you problems in the future.
While the rental company may offer enough coverage for some owners, others might need a separate commercial auto insurance policy — especially if you own one or more cars that you only use as rentals.
Hosts should look for a commercial policy with liability coverage, personal injury protection, comprehensive and collision coverage, and uninsured motorist insurance.
Commercial policies can cost hundreds of dollars each year. But you won't have to worry about your insurance company canceling your personal policy, and it could help you feel safer when renting your car to a stranger.
Car share insurance for renters
Many insurance companies have stopped providing coverage when you're renting a car from a private owner.
Before you book your rental, call your insurance company to see if your regular coverage will protect you while renting from a car-sharing company.
If you have comprehensive and collision coverage on your personal policy, it won't help pay for damage to the car you're renting.
Liability insurance for car share renters
If you cause an accident while driving a car rented from a peer-to-peer car share, your car insurance policy probably won't pay for damage to the other driver's car or their medical bills.
However, most car share companies include the minimum amount of liability coverage required by your state as part of your rental fee because it's illegal for you to drive without it.
In addition, car share companies typically offer higher liability limits for an extra fee. This is a good idea if you can afford it, because the minimum requirement may not be enough to cover the cost of an expensive accident.
People who frequently rent from car share companies and don't own a car should consider buying non-owner car insurance. You can choose higher liability limits, which can help protect you if you get into an expensive crash. It's also much cheaper than a standard policy.
Damage protection for car share renters
It's unlikely that your personal car insurance policy will pay for damage to your rental car.
Car share renters usually need to buy extra coverage to help cover repair costs for the car they rent.
Most companies make it easy to buy extra insurance coverage. For example, Turo offers three plans that can help pay for damage you cause to the car you rent.
On the other hand, Zipcar and Getaround include comprehensive and collision coverage for renters. It's important to pay attention to the deductible, though. Zipcar's coverage has a $1,000 deductible, which is fairly standard. But Getaround has a $3,000 deductible , which means you'll need to pay for any minor damage yourself.
Renters can also decline coverage, but you'll be on the hook for anything that happens to the car while renting it.
How car sharing works
If you don't use your car much, car sharing could be a way to earn some extra cash. With this type of arrangement, you allow people to rent your vehicle for a specified time and fee.
Peer-to-peer car sharing is run by third-party companies that connect car owners with prospective renters. The companies perform background checks to ensure both parties have clean records and auto insurance and that the rental car is in good condition.
Car sharing is different than ridesharing, where you hire a driver to take you from one place to another.
Frequently asked questions
Does my insurance cover Turo?
As a renter, your car insurance usually won't cover damage you cause to your rental car, other cars or other people while driving with Turo. You should call your insurance company before renting from Turo to check your specific coverage.
Turo hosts should also check with their insurance company before renting their car. Insurance companies typically exclude car sharing from your coverage. In many states, your company can cancel your car insurance policy or raise your rates if it finds out you've been using it to make money.
Does car sharing affect insurance?
Renting your car out can affect your personal car insurance, depending on where you live. Your car insurance company could cancel your policy or raise your rates. But some states — including California, Oregon and Washington — have made it illegal for insurance companies to cancel your policy for car sharing.
Does my credit card cover car sharing?
Credit card rental insurance varies from company to company, so you shouldn't assume you're covered if you rent from a car share service. Some specifically exclude peer-to-peer rentals, so it's best to check with your credit card company before you hit the road.
What should I do before signing up for car sharing?
Before entering a car-sharing agreement, read the policy carefully and check for fees.
You should also contact your personal auto insurance company and ask whether your policy covers car sharing to make sure you're not overpaying or duplicating coverage. This is especially important for hosts because your insurance company could cancel your policy for car sharing.
Lastly, hosts should make sure the car-sharing service has a system in place for thoroughly screening prospective renters for accidents and moving violations.
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