The sharing economy is a growing industry, and cars are a valuable asset that individuals can rent out to others. Suppose you’re thinking about renting out your car on a peer-to-peer rental network like Turo — you’ll need to work out insurance coverage directly with the rental service. Most auto insurance companies don’t include car-sharing services in individual policies, so unless you own the vehicle outright, reimbursement will go to the company through which you’re leasing in the event of an accident, theft, or damage to your car involving a renter.
How can I protect my car if I rent it out?
If you rent your car out to others, your individual auto policy typically won’t cover the vehicle while it’s being driven by someone else. That’s because your coverage is unique to you and your situation, including your driving history, age, where you live, etc.
Personal auto insurance also isn’t intended to include transactional scenarios like ride-sharing. In fact, some insurance carriers may deny coverage if you rent out your car.
Car-sharing companies do include liability policies, but it’s essential to do what you can to protect your car in the absence of direct car insurance. Consider taking extra precautions if you’re renting out your vehicle, such as:
- Each time your car is returned, do a thorough inspection for any damage so that you can document and report accordingly to the agency as soon as possible.
- Consider limiting the mileage limits and days of availability for your car to reduce the possibility of wear and tear.
- Install an EZ Pass in your car; that way, you can quickly reference any tolls that your vehicle has been charged for and request reimbursement from the driver through the app or agency.
Some insurance carriers may deny coverage if you rent out your car.
Can I rent out my car without car insurance?
You need to have individual auto insurance to rent out your car on a peer-to-peer site. Turo, for example, requires all car owners to have the minimum requirement of their state before listing the car on the site or app. Additionally, when you host on Turo, you’ll need to select a protection plan covering third-party liability insurance; other companies like Getaround offer a single protection plan that you’re automatically opted into. These requirements, which act as proxy insurance for renting out cars, are waived if you invest in commercial insurance (which may only be practical if you’re planning to rent out multiple cars on a car-sharing site).
Am I covered by my auto insurance if I’m renting a car from a ride-sharing network?
Yes, in most cases, your personal auto insurance does extend to cars that you rent. This means the limits and deductibles associated with your policy will also apply, so if you have both collision and comprehensive coverage, for example, these extensions are also in effect when you’re behind the wheel of a car you’ve rented from a peer-sharing network.
Additionally, if you don’t have auto insurance or would like additional temporary coverage, peer-to-peer companies let you opt into auto insurance for the time that you’re renting. These rates generally fluctuate depending on the level of coverage you want and the cost of the car you choose to rent.
Always refer to your own individual policy for explanation of coverage, or call your local Bolder Insurance Advisor for details.
This article is provided by Progressive Insurance, A Bolder Insurance partner.