Does My Auto Insurance Cover Car Sharing?
Most car sharing companies provide free coverage for hosts and renters. But the limits may not be high enough to protect you from expensive accidents.
Before signing up, you should call your insurance company to make sure it doesn't exclude car sharing from your coverage. This is especially important for hosts 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?
Your car insurance policy offers some coverage when you rent a car, but it usually doesn't protect car owners from damage to their vehicle while it's being rented out.
Most car sharing services — like Turo, Getaround and Zipcar — automatically provide free auto insurance for hosts, renters and third parties. However, coverage varies by state, and the limits may not be high enough to fully protect you after a bad accident.
Car share insurance for hosts
Your personal car insurance policy doesn't usually cover claims for accidents that occur while your car is being rented by someone else.
Some rental companies offer comprehensive and collision coverage for an extra fee, which can help pay for damage to your car while it's being driven by a renter.
Car sharing services typically provide additional liability coverage at no extra cost — it pays for any claims that personal policies don't cover.
For example, drivers that host with Turo 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 via 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 have one or more cars that you own solely for the purpose of renting out.
If you're thinking about buying a commercial policy, look for one with liability coverage, personal injury protection, comprehensive and collision coverage, and uninsured motorist insurance. A commercial policy can cost hundreds of dollars each year, but it could help you feel safer when renting your car to a stranger and help you avoid having your personal policy canceled.
Car share insurance for renters
When you're renting a car from a private owner, your car insurance policy protects you from damage you may cause to others.
However, 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 rented car, your own car insurance policy will help pay for damage to the other driver's car and their medical bills, up to your liability limits.
In addition, some car share companies automatically include higher liability limits when you rent a car.
This coverage is typically secondary, which means it only takes effect if your accident expenses are higher than the limits on your personal policy.
Drivers with no insurance are usually protected to a degree, too. 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.
People who frequently rent from car share companies and don't own a car should consider buying non-owner car insurance. It's much cheaper than a standard policy, and it allows you to choose higher liability limits, which can help protect you if you get into an expensive crash.
Damage protection for car share renters
It's unlikely that your personal car insurance policy will pay for damage you cause while driving another vehicle.
Car share renters usually need to buy extra coverage to help cover repair costs for a 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 choose to decline coverage in the event the car is damaged, lost or stolen — but you'll be on the hook for anything that happens to the car while it's in your possession.
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 that both parties have clean records and auto insurance in place, 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 covers any damage you cause to other drivers while driving with Turo, up to your policy limits. But it typically doesn't cover damage to the car you rent.
Turo hosts should check with your insurance company before you start renting your car because car sharing could be excluded 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. 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 one company to the next, so you shouldn't assume you're covered if you rent from a car share service. In fact, 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. 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 policy could get canceled 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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