Do you need extra insurance when renting a car through Turo? Check out our review of Turo's insurance coverage options along with notable features and drawbacks.
Think of Turo as AirBnB for cars: a car-sharing marketplace, allowing drivers to search for and book car rentals in the same way they would book a room or hotel. Available in the United States, the United Kingdom, Canada, and Germany, Turo works by allowing hosts to list their vehicles and guests to rent these vehicles on a per-day basis. Renters can pick up a car upon verification of their driver’s license and drop off the vehicle at the end of the rental period.
With car owners making their vehicle(s) available for near-strangers to rent and drive, the insurance implications of Turo’s car rental service can be complex. We’ll break down the ins-and-outs of car insurance for a Turo rental in our review.
Continue reading to learn more about how Turo’s insurance works and what coverage you need as a host or guest.
Founded in 2010 and based in San Francisco, California, Turo is a peer-to-peer car-sharing company often billed as the sharing economy's response to traditional car rental agencies. The key difference is that the company does not own or operate fleets of rental vehicles — instead, individuals can act as hosts and list their own personal vehicles as rentals. Renters seeking a rental car can make reservations for vehicles in their area with rates calculated on a per-day basis.
The company touts a selection of over 850 makes and models, over 350,000 available vehicles, and up to a 35% savings compared to car rental agencies. They could be a cost-effective option for those who don't drive regularly or own a car, and for drivers who need specific vehicle types for whatever reason — like a truck for moving a heavy piece of furniture, a roomy van for a family road trip, or a performance sports car for a weekend getaway in the canyons.
As with anything to do with car rentals or driving a car you don't own, the question of insurance is an inevitable — yet ever-important — topic. Let's review how to handle car insurance if you're thinking about hosting or renting a car through Turo.
No — for both hosts and renters, Turo does not automatically provide insurance coverage. Hosts and renters are given three protection plans to choose from or can decline coverage if they have their own applicable commercial or personal auto policies. If you opt-in for a Turo protection plan though you’re already insured, their liability insurance will supplement your existing coverage as a secondary source.
Hosts and guests are not required to have insurance protection through Turo, but all vehicles must carry some sort of insurance coverage — by way of Turo protection plans or independent policies provided by the host or renter. Guests are free to rely on their personal car insurance — provided their coverage extends to their Turo rental — while hosts can opt for commercial policies; both have the option of forgoing Turo plans completely.
Turo offers a few tiers of auto insurance coverage for hosts and renters, but neither is required to opt-in for a Turo protection plan if they have pre-existing insurance that sufficiently covers the rental or use of a Turo rental car. Continue reading for a more detailed breakdown of Turo's protection plans for hosts and guests.
Turo partners with Liberty Mutual to provide a choice between three tiers of coverage to their hosts — Basic, Standard, or Premium. Hosts can also choose to decline coverage, which would designate them as a Commercial Host; they would then be required to provide their own commercial rental liability insurance to any guests that rent their vehicles.
It’s worth noting that as a host, your take-home amount per trip will change depending on which protection plan you choose. If you decline a Turo plan, you can expect to keep 90% of the trip cost.
|Liability limit (Liberty Mutual)||$1 million||$1 million||$1 million|
|Deductible for physical damage||$3,000||$0||$0|
|Necessary repair costs||20% of the first $3,750, then 100% of repair cost in excess of $3,750 up to the lesser of the value of the vehicle or $125,000||Up to the lesser of the value of the vehicle or $125,000||Up to the lesser of the value of the vehicle or $125,000|
|Replacement vehicle reimbursement costs||No coverage||$30 per day for up to ten days||$30 per day for up to ten days|
|Exterior wear-and-tear||No coverage||No coverage||Covers eligible wear-and-tear|
|Loss of hosting income||No coverage||No coverage||Based on the vehicle’s earnings for the last month or average annual earnings|
|Trip price portion kept by the host||85%||70%||65%|
To use the car rental services of Turo, you are not required to have your own personal car insurance policy. Like hosts, renters can choose from three tiers of coverage through Turo’s protection plans.
If a guest already carries at least the state-mandated minimum amounts of coverage in the state where the vehicle is registered — and if their current policy extends to their Turo rental — they may choose to decline Turo’s protection plans. In addition, these protection plans are not offered if a vehicle is booked with a Commercial Host, as they are expected to carry their own commercial policy.
|Liability coverage||Minimum required by the state||Minimum required by the state||$1 million|
|Physical damage for up to the actual cash value of the vehicle||Yes||Yes||Yes|
|Mechanical or interior damage||No||No||No|
The main differences between these tiers are deductible amounts and liability limits. All include physical damage but no coverage for mechanical or interior damage.
The physical damage portions of the Standard and Minimum plans are meant to be used as secondary coverage to any other insurance you may already have, while the Premier plan is to be used as primary coverage.
It is a myth that car insurance follows the driver — in most cases, your personal insurance policy follows the vehicle. If you already have comprehensive and collision coverage, it’s more likely that your coverage also applies to a rental car, but it’s best to never make assumptions. This especially holds true for newer services that fall outside of the traditional car rental company or agency.
For hosts, your personal car insurance policy will never extend coverage for the rental use of your vehicle(s). You will risk your insurance provider dropping you as a client if you rent out your personal car for commercial purposes. Your options are to either opt-in for a Turo protection plan or get a commercial rental liability policy to become a Commercial Host. The latter is typically reserved for those who own a business renting out multiple vehicles.
As a Turo renter, it’s imperative to double-check with your insurance company to see if your coverage extends to arental car. Many insurers have no issues with covering a rental car but may not cover Turo rentals specifically. Be sure to ask exactly what coverages extend to a Turo vehicle — in many cases, insurance providers may offer liability but not physical coverage for a rental car.
The same holds true of any credit card benefits you may have for a rental vehicle — they usually come with a few caveats. It’s typically to be used as a secondary source of rental car insurance. Check with your credit card provider before making any assumptions.
The company may offer introductory discounts for first-time customers. Turo gives some flexibility to hosts and allows them to set their own discounted rates at their discretion.
Hosts can send discounts to guests online and through the Turo app; for instance, you can offer weekly or monthly discounts for renters making longer reservations or offer a discount on their next trip with one of your vehicles.
When researching our insurance company reviews, The Zebra first looks to the major rating services such as J.D. Power and Associates, AM Best, and regulatory agency the National Association of Insurance Commissioners (NAIC) for ratings and other data.
Not every insurance company is big enough to be rated by these organizations. In these cases, we look at other sources for our ratings, including the Better Business Bureau, Consumer Reports, and other reputable ranking organizations to get a sense of their overall performance. That, combined with the company’s available insurance offerings, gives us what we feel is a fair and accurate portrait of what you can expect as a customer of one of these insurers.