Car sharing insurance is coverage that protects a driver when renting a vehicle from a car sharing service or a peer-to-peer rental service. Car sharing services provide affordable and convenient transportation that includes car insurance with the basic fees, making it easy for you to get on the road with confidence.
Key Things to Know About Car Sharing Insurance
- Your personal policy applies. Your personal insurance policy will usually extend to cars rented through car sharing and peer-to-peer services.
- You’ll have minimum coverage. Rentals from car sharing and peer-to-peer services generally include the minimum level of coverage required in your state, though it may be primary or secondary to your own personal policy, depending on your state and your rental contract.
- You’ll need a separate policy if you’re the car owner. Car owners who rent their vehicles using peer-to-peer services won’t be covered by their personal policy while their car is being rented out and will need separate insurance provided by the peer-to-peer company.
- Renters may have additional coverage. Certain credit cards provide users with protection from theft or damage when renting from car sharing companies.
Insurance for Car Sharing Services
When you rent from the major car sharing companies, like Enterprise Car Share or Zipcar, your rental will include at least the minimum level of car insurance in your state. That includes personal injury protection (PIP) and uninsured/underinsured motorist insurance in states where they are required by law.
Note that state laws vary and each car sharing service has its own rules. But we have collected the main details about each company’s coverage in the table below.
Insurance Policies From Car Sharing Companies
| Company | Liability Coverage | Collision/Comprehensive Deductible | Additional Details |
| Enterprise Car Share | Equal to the state minimum insurance requirements | $1,000 - $2,000, depending on the location | You may be able to purchase additional coverage for your rental in some areas. |
| Zipcar | Equal to the state minimum insurance requirements | $2,500 “damage fee” | 1. Liability can be raised to $300k for a fee. 2. The damage fee can be reduced or eliminated if the optional Plus or Premium protection plan is purchased. |
Other car sharing companies, such as Free2move and Envoy, also provide renters with insurance that satisfies the state’s minimum requirements. However, the availability of these companies is limited. Even though Free2move is available across Europe, it is only available in Washington, D.C. in the U.S. Envoy is only available through certain apartment buildings.
Peer-to-Peer Car Sharing Insurance
Different from the services above, community car sharing now makes it possible for private car owners to rent out their personal cars through car sharing apps provided by companies like Turo. This presents more complicated insurance issues for both car owners and renters.
For example, in the case of an accident caused by a renter, the owner of the car, the driver and the peer-to-peer car sharing service could all potentially be targets of a liability lawsuit. Therefore, we will examine the insurance issues for owners and drivers separately.
For Car Owners
For owners who want to rent out their cars this way, Jim Levendusky, vice president of telematics at Verisk Insurance Solutions, warns that a typical auto policy won’t cover your car when it’s being used in a business like a public rental and “in many cases, car sharing is basically analogous to a public rental.” Therefore, car owners cannot rely on their personal car insurance to provide protection when it is being rented through one of these services.
In view of this, peer-to-peer car-sharing companies offer their own insurance coverage that applies only during the rental period:
- Liability: The peer-to-peer rental company includes liability insurance that provides coverage for third-party claims.
- Collision and Comprehensive: The car share company pays for damage caused during rentals, up to a maximum of the actual cash value of the vehicle.
- Roadside assistance: The company offers coverage if the car breaks down during a rental.
Car owners should carefully read the fine print, as there may be limitations. For example, most car sharing agreements allow for the company to declare a vehicle not fit for a specific purpose. In other words, if an owner didn’t adequately service something like the brakes, horn, or seat belts, the car sharing company may be able to get out of paying any claim.
There is an additional risk. Your insurer may cancel your personal policy – even retroactively – once they understand that a car is rented for public use. States like California, Colorado, Oregon and Washington, have passed laws stating that insurance companies can’t drop customers solely for car sharing. But in other states, renters may be putting their personal coverage at risk.
For Car Renters
As with any other car rental, unless specifically excluded in your policy, you will be protected by your own car insurance when renting a car from a peer-to-peer car sharing service. Peer-to-peer companies like Turo also provide supplementary insurance that will be secondary to your own coverage in case of a claim. Renters without their own insurance will get primary coverage from this insurance.
Insurance Policies From Peer-to-Peer Services
Turo
Turo is the main peer-to-peer rental company used in the U.S. If you are planning to rent out a car through Turo, here are some details on the insurance that is provided:
- Liability coverage is equal to the state minimum insurance requirements.
- Renters can purchase additional liability coverage that can raise limits to $300k.
- Renters can purchase optional protection that reduces or eliminates their liability for physical damage to the car.
- Drivers younger than 21 are not eligible to get a $0 deductible for physical damage coverage.
Turo also includes personal injury protection (PIP) and uninsured/underinsured motorist insurance in states where they are required by law.
All companies listed above include personal injury protection (PIP) and uninsured/underinsured motorist insurance in states where they are required by law.
Additional Car Sharing Insurance You Already Have
When you’re driving a vehicle from a car sharing service, you should read the contract to determine whether the insurance that company automatically provides will be primary or secondary to other insurance you already have – your personal policy or coverage from your credit card, for example.
Your Own Car Insurance
Not everyone who joins a car sharing service is living car-free. Car owners get an added level of coverage from their own car insurance policy when using a vehicle from a car sharing service. It works like any other car rental. Unless specifically excluded in your policy, the insurance that protects you when driving your own car will still protect you when you’re driving any other vehicle.
Keep in mind, though, that you won’t get better coverage than you get on your own car. If you’re not carrying collision and comprehensive insurance on your vehicle, for example, your car insurance policy won’t cover damage to the car you’re renting.
Car Sharing Coverage From Credit Cards
When you rent a car with a major credit card, you may automatically get some level of coverage for theft or damage to that vehicle. Depending on what kind of credit card you use, that coverage may extend to car sharing services such as Zipcar, but it is not likely to extend to cars rented via peer-to-peer car sharing. According to a Visa spokesman, coverage for cardholders only extends to vehicles “owned by a commercial enterprise.”
Here are a few key things to note about the coverage provided by credit cards:
- American Express, Mastercard, and Visa don’t specifically mention in their terms and conditions whether they provide coverage for car sharing companies.
- Visa settled a class-action lawsuit for claim denials involving Zipcar rentals.
- Some users on forums note that their credit card does cover Zipcar but not Turo, and Zipcar mentions that some credit card companies may provide coverage.
- It’s best to contact your credit card company directly to find out whether they provide coverage for car sharing rentals.
- Discover no longer provides rental car insurance, so you won’t get coverage with any of their credit cards.
Your Own Health Insurance
If you have health insurance, that policy will provide coverage for medical care you need after an accident.
Tips for Car Sharing Customers
To make sure you’re adequately covered when you join a car-sharing service, keep the following tips in mind.
Consider Non-Owner Insurance
People who don’t own a car can get liability coverage from a non-owner car insurance policy. Since all car sharing services offer some level of liability coverage, most drivers won’t need this, but it can be an affordable way to get higher coverage limits than are available from the car sharing service.
Decide Whether a Damage Waiver Is Right for You
Make sure you’ll be able to cover the deductible you would owe after in the event of an accident in a car sharing vehicle. If not, paying extra for any available damage waiver could be a smart choice.
Check for Damage Before You Rent
Instructions for all companies strictly require walking around the vehicle and looking inside to report any damage at the beginning of the rental period. Take these guidelines seriously to avoid getting blamed for damage caused by previous renters.
Make Sure to End Your Rental
Until you officially end the rental, you’re liable for any damage to the car. So make sure you correctly follow the procedures to finish your rental session.
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