Booking a shared car when you don't have your own car insurance
How to handle car insurance when you book a Zipcar, Getaround, or Turo and you don't have car insurance of your own.
Car sharing services have made car sharing fun, easy and affordable. Instead of dealing with a car rental agency, you can find the perfect car for your needs from real people through services like Turo, GetAround, Car2Go, Maven, or Sixt.
Let’s say you have an amazing weekend getaway to wine country planned and have found the perfect car (An Audi R8! Woot!) through Turo. Since you don’t have a car, you don’t have insurance.
What should you do?
Insurance plans offered by car sharing services don’t cover all situations. Rental car insurance through a credit card won’t cover a borrowed car. A non-owned auto insurance policy, like the one offered in Surround’s starter pack, will cover you for injuries or damage you cause and any medical payments for your own injuries when you borrow a car. You still need to buy coverage for physical damage to your vehicle (“Collision”).
Love the Car, Should I Buy Their Insurance?
While car sharing services offer different insurance plans for guests using their service, you need to read the fine print carefully. And who has time for that when you’re trying to get a vacation underway? It turns out that it’s worth your time to check the fine print, because it could save you a lot of money that would be more enjoyably spent on wine tasting. Here’s what you need to know before clicking “Buy” through a car share service.
The three main coverages that you need to be protected when driving a car are:
- Third party liability – covers the cost of damage or injuries that you cause in a car accident
- Property or physical damage – covers the cost of damage to your personal property and, more importantly, the vehicle you’re driving either due to a “Collision” (accident) and/or some other source, for example a fire or flood (“Comprehensive”)
- Personal injury protection or medical payments – pays for your injuries no matter who caused the accident
Let’s look at Turo’s insurance plans.
Table 1 Summary of Turo's insurance plans
Personal Injury Protection ("PIP"):
- The Liberty Mutual Policy provides the minimum amount of PIP coverage allowed by the law in those few states where PIP coverage is required by law and cannot be waived.
- The scope of PIP coverage varies by state, but typically protects guests and passengers (up to a stated dollar amount) for medical expenses, loss of income, funeral expenses, and similar expenses resulting from injuries incurred during the use of the booked vehicle during the booked trip, without regard to who was at fault.
- PIP is not required in all states and may be waived in some states. Turo has either waived this coverage entirely or subscribed to the lowest limit allowable by state law. Hosts and guests are bound by Turo's election and, in addition, agree to be bound by that election under the Terms of Service.
Turo’s plans all cover third-party liability and physical damage. There are a few issues with the insurance plans Turo offers, however. First, the PIP coverage provided by Turo isn’t offered in all states, and for the states where it is required, Turo only provides the minimum coverage required by state law.
For example, in Massachusetts, the minimum PIP required by law is $8,000. PIP covers medical care resulting from a car accident and lost wages. You may also have this coverage available as part of your health insurance, accident, or disability policy, so you’ll need to assess your own situation before deciding how much PIP you need.
Second, the Standard and Minimum Plans are secondary and require you to have your own insurance. If you don’t have your own auto insurance, you can’t select those plans. That means you’d have to purchase the Premier insurance plan from Turo, at a cost of 80% of the trip price (What?! Yep).
But guess what - the Premier plans don’t cover trips in Super Deluxe vehicles such as your Audi R8. Sad trombone. You definitely don’t want to be on the hook for any potential damage to an R8, because that could add up quickly. If you do have your own insurance, you could choose one of the other plans.
But the third issue is that Turo’s auto insurance deductibles (an amount you pay out of pocket before insurance coverage begins) can be quite high, like the $3,000 for the Standard plan. You may be thinking, “That's fine! I’ll skip Turo’s plans because my credit card offers coverage for rental cars.” Actually, nope, they don’t in this case.
Most credit card companies don't consider car sharing the same as car rentals, so they would deny a claim faster than you can say Napa.
Even if the credit card does offer some type of auto insurance for borrowed cars, they probably cover only physical damage to the vehicle you’re driving (collision), not the other vehicle (third party liability). Is there another way to get some insurance coverage? Yes, it’s called Non-Owned Auto Insurance.
The Little Known, But Very Useful, Non-Owned Auto Insurance
Non-owned auto insurance is insurance that covers you when you’re driving a car that you don’t own, such as your Turo that you reserved for your weekend getaway, a Zipcar, Getaround, rental car, or even if you borrow a car from a friend. This type of insurance includes third party liability coverage for any injuries or damage you cause to others. Surround's Starter Pack also provides for medical payments if you get injured by an uninsured or underinsured driver and covers damage to your belongings. You would unfortunately still need to purchase coverage for physical damage (collision) to the car you’re driving through one of Turo’s plans.
With a non-owned auto insurance policy in your pocket, though, you would have the option of purchasing the Standard or Minimum plan as secondary coverage instead of the Premier plan. With the money you save, you could splurge for some extra tasting flights during your wine tasting weekend in Napa (just make sure to have a designated driver).
Insurance for the Way You Live
Wouldn’t it be great if an insurance company designed the right coverage for your lifestyle? Surround is working to change the way you think about and use insurance.