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How Does Turo Car Rental Work?

Turo matches car-rental customers with private cars using its online website or mobile app.

While other rental car companies rent out their own cars, Turo matches car-rental customers with private cars using its online website or mobile app. If you meet certain qualifications and have the right kind of car, you can rent out your car through Turo. Your car can be an earnings engine! For example, Turo CEO Andre Haddad uses the company app to rent out his own Tesla Model X for $500 a day.

If a customer uses the Turo app to rent an auto for a day or a month, the car owner is considered to be a "host" or a "commercial host." The renter is called a "guest."

  • A "host" purchases auto insurance from Turo.
  • A "commercial host" relies solely upon their own commercial auto insurance.

Turo has fostered such an enthusiastic, vibrant community, the Wall Street Journal reports plans for the company going public in 2021.

This article takes a deep dive into what insurance coverage Turo offers a host or a guest and what auto insurance a host, commercial host or guest must have to use Turo.

How Does Turo's Insurance Work?

Turo's auto policies are all underwritten by Liberty Surplus Insurance Corp., a Liberty Mutual Group subsidiary.

Whether you are a host or a guest, your auto insurance pays out first in the event of an at-fault accident. When your liability coverage runs out, Turo's liability protection will provide further liability insurance backing, as well as personal injury protection or uninsured/underinsured motorist coverage in the states that require it. In short, Turo's insurance is considered "excess" insurance.

When your own coverage and Turo's insurance both run out, you will be responsible for any costs for which you may be liable. If you are a commercial host or book a car with a commercial host, the same policy succession applies, but Turo is not involved at all.

The other important thing to keep in mind is that all of Turo's coverage is only active during the booked trip. Also, this article only deals with the car-renting company's U.S. operations, not in Canada, the UK or anywhere else.

Turo Liability Insurance for Hosts and Guests

All local hosts in the U.S. are automatically covered for liability claims of up to $750,000. However, the liability coverage for guests depends upon each individual state's laws regarding auto liability coverage.

For guest drivers, Turo's liability insurance duplicates the minimum liability coverage a guest's home state requires. So, if you rent an auto from one of the local hosts in, say, Hawaii, your coverage and Turo's liability coverage will be the same, following the Aloha State's mandated liability minimums:

  • $20,000 for bodily injury per person

  • $40,000 for bodily injury per accident

  • $10,000 for property damage

If you elected to purchase liability policies with higher dollar limits, Turo's limits will remain at the same dollar amount as the state's minimum limits. But, remember, Turo's liability coverage will only pay out once your own liability coverage is used up (although there are various exceptions in Maryland and West Virginia).

If you choose Turo's Premier plan (see below), which offers the most protection, your coverage limits will be raised to a combined single limit of $750,000.

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Turo Insurance for Hosts

Besides the automatic $750,000 for liability, Turo's offers hosts five different levels of contractual reimbursement—which is not the same thing as insurance—for physical damage and theft. No matter which level a host chooses, Turo pays "100% of eligible damage costs above the deductible," which varies by plan, up to the actual cash value of the auto or $125,000, whichever is the lesser amount. Further, 24/7 roadside assistance is included in all five policies.

The 60 Plan

  • Earn 60% of the bill

  • No deductible

  • Includes exterior wear-and-tear reimbursement

  • Includes loss of hosting income during repair or a $50-per-day replacement auto reimbursement for up to 10 days

The 75 Plan

  • Earn 75% of the bill

  • $250 deductible

  • $30-per-day replacement auto reimbursement during repair for up to 10 days

The 80 Plan

  • Earn 80% of the bill

  • $750 deductible

The 85 Plan

  • Earn 85% of the bill

  • $1,625 deductible

The 90 Plan

  • Earn 90% of the bill

  • $2,500 deductible

So, with the 90 plan, you get a bigger chunk of the bill than the 60 plan, but you take on much more risk. However, you can change your plan at any time.

Important Checklist

You must always keep your personal insurance card, auto registration, and Turo incident information card in your car and inform guests of their location. If a guest is pulled over by law enforcement, these documents are proof of insurance. 

Further, commercial hosts must disclose on the vehicle listing any additional bills, penalties or costs, including the extent and price of the protection plans or collision damage waiver as well as the policy on mileage overages, smoking, cleaning, delivery, late or early returns and fuel replacement. 

Commercial Hosts Are Rental Car Companies

To become a commercial host, you must choose the "owner-provided insurance" option, which means that you will be considered an independent car rental company and to buy commercial rental auto insurance. The Turo app will identify the commercial host as the insurance provider on all cars listed.

Turo requires its commercial hosts to retain commercial rental insurance to cover themselves, their guests and their cars. Here are the standard commercial rental auto insurance products:

  • General liability coverage, which protects against claims

  • Commercial property insurance, which protects your auto

  • Business interruption insurance, which covers lost income

  • Excess liability insurance, which increases your liability limits

With Turo, You Can Choose Guests with Insurance

While you must provide commercial rental auto insurance to book trips through Turo, you can require your guests to meet certain insurance prerequisites. For example, you could require all your guests to have their own liability auto insurance, which would pay out before your commercial insurance in the event of an at-fault accident. Or you could require your guests to purchase only a collision damage waiver, a stand-alone product that covers vehicular theft and damage but usually not bodily injury.

An owner (or host) can require that guests have their own liability auto insurance.

Commercial hosts make 92.5% of a booking, and all claims, late returns, and any price points and fines are up to the commercial host to decide. However, all your terms and conditions must be plainly stated in your Turo listing.

Turo's Auto Insurance for Guest Car Rentals

If you want to rent the perfect vehicle for a picture-perfect road trip or a classic cruiser for a luxurious weekend to some swanky, exotic spot, you don't need to have your own personal auto insurance to have a Turo car delivered to you, unless the host requires it.

Further, all guests must sign up for one of Turo's four plans: Premier, Standard, Minimum and Decline Physical Damage Protection. Turo's insurance matches your state's mandated minimum insurance, no matter what kind of insurance your state deems necessary.

When your car is delivered, you should document the auto's condition, inside and out, using the Turo interface.

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Insurance for Turo Guests

It is important to note that Turo's Premier, Standard and Minimum policies do not cover eligible mechanical or interior damage, and coverage may be refused if any approved driver does not abide by Turo's terms and conditions. The primary guest is financially responsible for the damage, regardless of who is found to be at fault. Including the Decline Physical Damage Protection plan, none of the plans cover "deluxe or super deluxe" cars worth more than $25,000. Here's a full review of the auto insurance plans for renters, or "primary guests":

Premier Plan

While the Standard and Minimum plans have a "contractual limitation of liability" up to which Turo will pay for physical damages, the Premier plan pays for any and all physical damage, excepting eligible mechanical or interior damage, no matter the cause. The renter is not obligated to pay a cent for physical damage and won't be charged a deductible. However, the guest is still obligated to pay for costs unrelated to liability and physical damage, which Turo calls "related costs": fuel, excess mileage, parking tickets, estimation or appraisal costs, storage fees, towing fees, repair or replacement costs, registration or transfer taxes and claims processing costs, among others.

Standard Plan

If a guest is involved in an accident or the auto is otherwise subject to damage excepting eligible mechanical or interior damage, the Standard plan requires the guest to pony up a $500 damage deposit and any related expenses (appraisal costs, claims administrative fees) but nothing more. If the bill to fix the damage and the bill for the related expenses end up being below the deposit amount, the guest will get the balance.

Minimum Plan

If a guest is involved in an accident or the auto is otherwise subject to damage excepting eligible mechanical or interior damage, the Standard plan requires the guest to pony up a $500 or a $3,000 damage deposit, depending on the extent of the damage. Of course, the guest is also responsible for any related expenses. If the total expense of the fix and the related costs ends up being below the deposit amount, the guest will get the balance.

Decline Physical Damage Protection Plan

While the Minimum plan makes the primary guest liable for up to $3,000 and no more, this plan makes the primary guest responsible for the cost of any and all damages when the Turo plan runs out. In short, the primary guest who chooses this plan could be on the hook for the total cash value of a totaled vehicle as well as any related costs.

Guest Requirements To Watch Out For

In the U.S., Turo peer-to-peer renters must meet be at least 21 years old, sign up online, have a valid driver's license and supply their own DMV driving record. Commercial hosts might have their own particular guest requirements:

  • Renters under 25 years old may be charged a separate fee.

  • High-value cars may require a security deposit.

  • Renters may have to pay for post-trip costs.

If you choose a commercial host and want to add a secondary driver, that driver must be approved by the commercial host, not Turo.

NOTE: You must pay your host through the Turo Go app for any services or costs. If you pay your host directly, you are in violation of Turo's gray market transaction policy.

Is My Vehicle Eligible for Turo's Service?

In the U.S., Canada, the UK and beyond, Turo lets all its guests choose from a totally unique selection of cars. If you list your ride on Turo, you cannot employ the renting services of other rental companies. Vehicles listed on Turo must meet certain other requirements, too: 

  • Be registered in any state except New York

  • Meet all auto insurance and legal requirements in your state

  • Have a fair market value of up to $150,000

  • Be no more than 12 years old

  • Have fewer than 130,000 miles

  • Have a clean title, not a "branded" or "salvage" title

  • Never declared a total loss

"Specialty" and "classic" cars have slightly different restrictions. But no matter the vehicle, you must keep it looking good and have a vehicle mechanical and safety inspection at least once a year. Turo has further conditions, the details of which are on the company's website.

Vehicles that Turo Won't Accept

Still unsure if your ride is eligible for Turo's car-sharing service? To put it another way, here are some vehicles Turo will not take on: a limousine, motorcycle, recreational or off-road vehicle, passenger van that seats more than eight people, box truck, global electric motorcar (GEM) or similar car not designed for highway use, construction or farm equipment, a ride that requires a commercial license.

The Turo Car Rental App

Apple Store reviews give the Turo car-sharing app 4.8 out of five stars. Google Play reviews give it 4.9 out of five stars.

Guests can book Turo's services through the company site or by using its iOS or Android app. The company uses data to keep track of your customer experience, including your contact information, usage data, search history, purchases and continued use. Whether you need a car to go to the airport or it's moving day, here's the deal with the online site and the mobile service :

  • Review the vehicles listed based on make, destination or desired experience

  • Book or cancel a vehicle. (You must cancel within 24 hours of the signed-up rented time.)

  • Contactless check-in options

  • With GPS running, identify the location of the car

  • Lock and unlock the auto

  • Upload and store pre- and post-trip images. Hosts and guests should document a full review of the car, both inside and outside.

SmartFinancial and Turo Car Rentals

Whether you need auto insurance as a guest or auto insurance as a host, SmartFinancial can find an affordable policy that fits your situation. Or, call 855-214-2291 to speak with one of SmartFinancial's agents.

Get a Free Auto Insurance Quote Online Now.

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