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 such as Zipcar provide affordable and convenient wheels on an as-needed basis, and by including car insurance with the basic fees, they make it easy for you to get on the road with confidence. Peer-to-peer services like Turo offer insurance as well, but it gets a little more complicated since the car you’re renting is owned by another consumer, not by a car rental company.
Key Things to Know About Car Sharing Insurance
- Your personal insurance policy will usually extend to cars rented through car sharing and peer-to-peer services unless explicitly stated otherwise.
- Rentals from car sharing and peer-to-peer services will include the minimum level of coverage required in your state.
- Car owners who rent out their vehicles using a peer-to-peer service (sometimes called a community-sharing service) need to rely on separate insurance provided by the company, not their personal policy.
- Certain credit cards provide users with protection from theft or damage when renting from car sharing companies.
- Drivers should always make sure that they’re adequately covered and they understand the terms of their rental when using a car sharing company.
Insurance for Car Sharing Services
When you rent from the major car sharing companies – Enterprise Car Share or Zipcar, for example – 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
|Enterprise Car Share||State-Required Limits||$500||Liability can be raised to a $300K limit and the damage waiver reduced for an hourly fee that averages $1.40 (depending on location).|
|Zipcar||100/300/25||$1,000 “damage fee”||Damage fee reduced to $0 if optional $79/year damage fee waiver is purchased.|
For drivers younger than 21, liability insurance has only state-mandated limits.
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 Getaround, JustShareIt and 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 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, manager for 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 three companies above include a $1 million liability policy to the car owner.
- 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.
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 the brakes, horn, or seat belts (for example), the car sharing company may be able to get out of paying any claim.
There is an additional risk: Insurers may cancel a policy – even retroactively – once they understand that a car is rented for public use. So far, three states — California, 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. Each of the major per-to-peer companies – Getaround, JustShareIt and Turo – also provides 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. The table below has details on the insurance that is provided.
Insurance Policies From Peer-To-Peer Services
|Getaround||Equal to owner’s private policy or three times the state minimum for combined single limit, whichever is greater||$750||Insurance is provided only in California, Illinois, Oregon, Texas and Virginia. In all other states, renter must provide own insurance.|
|JustShareIt||Equal to owner’s private policy or three times the state minimum for combined single limit, whichever is greater||$2,500||MedPay up to $1,000 included as secondary coverage.|
|Turo||$1 million||$500 - $3,000||“Basic” insurance has $3,000 deductible. “Premium” insurance has $500 deductible. Renter with own car insurance policy can also decline RelayRides insurance.|
There is a lower level of coverage for comprehensive claims caused by acts of nature (e.g., a hailstorm), rather than theft or vandalism.
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, your primary auto insurance protection will come from the car-sharing company’s coverage. But when that runs out, you may have a secondary level of protection from other insurance policies you carry or from your credit card.
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.
Paying With A Credit Card
When you rent a car with a major credit card, you 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, for example, coverage for cardholders only extends to vehicles “owned by a commercial enterprise.”
Car Sharing Coverage by Credit Cards
|Credit Card||Car Sharing Coverage?||Peer-To-Peer Coverage?|
Your Own Health Insurance
If you have health insurance, that policy will provide coverage for medical care you need after an accident.
4 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:
1. 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.
2. Damage Waiver
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.
3. 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.
4. 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.