Finding Car Insurance to Rent Out Your Car
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What if your car could pay for your personal auto insurance?
It’s possible. If you live in a large city served by peer-to-peer car sharing and rental car services like Turo and Getaround, renting your car for a few days could cover your monthly auto insurance bills.
“Over 350,000 vehicles have been listed on Turo to help hosts offset the cost of ownership,” says Turo. “Many Turo hosts list their cars so they can cover their monthly payments, while others simply want help managing insurance and maintenance costs.”
We love the idea of putting your own car to work when you’re not using it to pay for your own insurance. But can you really make good money? And do you need different car insurance to rent out your car?
If you have the right vehicle, you can earn a lot. In this article, we’ll cover what it means to work with a rental car service like Turo and what that means for your auto insurance policy. You should be aware of how your insurance company covers you — and if you’re looking to cut your car insurance bill, Compare.com is still the quickest way to find the best deal.
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Can Renting My Car Pay Off My Car Insurance Policy?
That depends on a few factors, including what kind of car you drive and how much your regular insurance costs. For example, you can make more money renting out a brand-new Audi than a 10-year-old Toyota Corolla (no surprise), but your Audi insurance rates probably will be much higher.
You don’t have to own a luxury sports car to make money with a personal rental vehicle. However, when you compare daily rental rates to estimated monthly car payments, the top earning vehicles on Turo tend to be economically priced, like the Fiat 500, Nissan Versa, and Volkswagen Jetta.
According to Turo, here are the top earning vehicles by price range from October 1, 2017, to October 31, 2021. This data is across 14 top market areas for the model year 2018 and newer vehicles valued up to $75,000, rented at least seven days a month for three months.
- Economy ($10,000-$30,000): Fiat 500, Chrysler Voyager, Kia Rio
- Mid-range ($30,000-$50,000): Audi S5 Cabriolet, Alfa Romeo Stelvio, Cadillac CT5
- Upscale ($50,000-$75,000): Porsche Panamera, Porsche 718 Boxster, Lincoln Navigator L
Let’s look at a 27-year-old driver from West Hollywood with a new vehicle, a solid driving record, and basic car insurance that satisfies the 15/30/15 California state minimum insurance requirements. That means he has an auto policy with limits of $15,000 for bodily injury/death, $30,000 for injury/death to more than one person, and $15,000 for property damage.
|Vehicle||Monthly Car Insurance||Monthly Rental Income|
Not bad! For our hypothetical driver, his monthly rate — (assuming his earnings match the average) — is double his insurance bill. In short, his car can pay for its insurance. However, renting your car through Turo will require you to pay for additional liability coverage, offsetting any profit.
How Does Insurance to Rent Out Your Car Work?
When you become a Turo host, the company covers full repairs up to a limit of $125,000 with a standard $750,000 third-party liability insurance from Travelers Insurance. This type of coverage protects you against lawsuits for injuries or property damage if the person driving your car causes an accident.
There is a caveat: Unless a commercial auto insurance policy covers you, Turo requires hosts to choose and pay for one of five auto insurance coverage options.
- 60 plan: Awards the host 60% of the trip price. There is no deductible, and Turo covers 100% of eligible damage costs.
- 75 plan: Awards the host 75% of the trip price. Turo covers 100% of eligible damage costs with a $250 deductible.
- 80 plan: Awards the host 80% of the trip price. Turo covers 100% of eligible damage costs with a $750 deductible.
- 85 plan: Awards the host 85% of the trip price. Turo covers 100% of eligible damage costs with a $1,625 deductible.
- 90 plan: Awards the host 90% of the trip price. Turo covers 100% of eligible damage costs with a $2,500 deductible.
All five plans offer $750,000 in liability insurance and varying coverage limits, allowing hosts to earn between 60% and 90% of bookings, reimbursing you up to your vehicle’s actual cash value (ACV).
On top of a percentage of the trip price and low deductibles, the 60 and 75 plans offer rental reimbursement (rental car coverage) of $30-$50 per day up to a 10-day maximum. Remember, hosts with commercial auto insurance can decline Turo‘s car insurance without completing a loss damage waiver (LDW) or collision damage waiver (CDW).
What if the Driver Renting Your Car Gets Into a Car Accident?
If the renter gets into an accident, the first step is to file a claim right away. Any claims made more than 24 hours after the trip will not be considered. All claims should include post-trip photos to be eligible for physical damage reimbursement. If a tow or mechanical damage prevents you from taking pictures, Turo would then assign a waiver.
Turo will take up to three business days to inform you of their decision to cover based on your car rental insurance and protection plan details. During this claim eligibility period, Turo will determine who or what was at fault and if your claim adheres to all Terms of Service guidelines. In the event of an accident, Turo does not cover collision coverage, comprehensive coverage, and medical payments coverage due to pre-existing conditions. Any invalid claims may force Turo to assess fees and withhold future earnings.
Next, Turo allows two resolution methods: filing a claim with Turo or using the guest’s personal auto insurance or insurance provider. Turo will ask that you enter a collision repair shop quote or estimate on damage repair costs, arriving at an estimate based on your protection plan deductible and guest’s maximum out-of-pocket.
If you and your guest agree to damage payouts, you still have 20 days from the trip’s end date to re-engage Turo with a new claim. If payment between hosts and guests exchanges hands or if more than 20 days pass, Turo can no longer intervene.
Depending on the damage, Turo may restrict your insurance to rent out your car until your vehicle is fixed and becomes operable.
Will your car insurance policy be affected by a renter‘s accident? Turo says: “As a general statement, we believe your insurance should not be affected if your vehicle is covered under one of Turo‘s coverage plans. If the guest gets into an accident, our insurance policy will go into effect. That should leave your personal policy untouched.”
However, in some states, parts of your car insurance coverage may “follow the car.” That means uninsured motorist/underinsured motorist coverage, personal injury protection (PIP), and liability protection (including comprehensive coverage) may apply to the person driving the car, even if you aren’t the driver.
That means your car insurance costs could go up in an accident. In the worst-case scenario, a guest driver could cause damages exceeding $1 million in liability policy coverage.
Finding the Best Insurance for Renting Out My Car
Here’s the upshot: If you don’t need your car every day and you want to earn some money, personal car rental might be something worth trying. Getting insurance to rent out your car is an important piece of the puzzle and can impact any earnings you make.
Check with your insurer to make sure you’re protecting yourself — and if you feel like you’re paying too much for insurance, maybe it’s time to find a better deal on Compare.com.
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