Peer to Peer Car Insurance: Everything You Need to Know

Peer to peer car insurance refers to coverage for vehicles rented through peer to peer car sharing platforms like Turo and Getaround. Here’s a comprehensive guide on how peer to peer auto insurance works for owners and renters.

What is Peer to Peer Car Sharing?

Peer to peer car sharing allows private car owners to rent out their personal vehicles to others through smartphone apps and websites. Major providers include:

• Turo
• Getaround
• HyreCar
• Avail

It provides an alternative to traditional car rental companies. Vehicle owners earn income while renters get short-term access to cars at affordable rates.

How Does Insurance Work for Peer to Peer Car Sharing?

Peer to peer car insurance involves two key components:

1. Coverage for car owners

Personal auto policies typically exclude coverage when vehicles are used for commercial purposes like renting. So owners need insurance provided by the peer to peer platform to protect their car during rentals.

2. Coverage for renters

Renters are covered by their own auto insurance as with regular car rentals. Peer to peer platforms also provide liability and physical damage coverage.

Let’s look at both types of peer to peer car insurance in more detail.

Car Owner Peer to Peer Insurance

When listing a car on a peer to peer network, the vehicle owner’s personal insurance likely won’t apply during rentals. That’s because renting out a car for profit is generally excluded by personal auto policies.

To fill this gap, peer to peer companies provide liability, collision, and comprehensive coverage for car owners during each rental period. Here are key highlights:

• Liability limits – $1 million is typical but can vary by provider. This covers injury and property damage claims.

• Collision/comprehensive – The platform’s insurer pays for damage to the owner’s car up to its actual cash value.

• Deductibles – Owners pay deductibles for claims, but some platforms offer zero deductible options.

• Policy overrides personal insurance – The peer to peer insurance supersedes the owner’s regular policy.

• Limited timeframe – Coverage only applies during active rental periods.

Owners pay fees to the peer to peer service to access this commercial coverage when renting their cars. It’s mandatory – vehicles can’t be listed without it.

Renter Peer to Peer Insurance

Renters also need protection when using shared vehicles. Peer to peer platforms provide liability and physical damage coverage for renters:

• Liability – Injury and property damage liability meets state minimum requirements. Additional limits may be available.

• Personal injury protection – Provided in no-fault states.

• Uninsured motorist – Included where mandated by law.

• Collision insurance – Provided with varying deductible options by company.

• Comprehensive – Also offered based on the provider and plan selected.

This insurance is secondary to any coverage renters have through their own auto policies or credit cards. For renters without their own insurance, the peer to peer company’s policy acts as primary coverage.

Does Your Personal Insurance Cover Peer to Peer Rentals?

Renters are typically covered by their own car insurance during peer to peer rentals. It works just like any other car rental – personal insurance extends as secondary protection unless explicitly excluded.

But coverage for car owners is more complicated. Personal auto policies generally exclude coverage for vehicles used for commercial purposes like renting. This poses a problem for owners listing cars on peer to peer platforms.

A few states have laws prohibiting insurers from dropping customers solely for participating in car sharing. These include:

• California
• Oregon
• Washington

Outside of these states, however, renting a car through a peer to peer service can potentially void the owner’s regular insurance policy.

Key takeaway: Owners shouldn’t rely on their personal insurance when renting out cars to peers. The peer to peer platform’s commercial coverage is primary.

Peer to Peer Car Sharing Insurance Requirements

Peer to peer car insurance must meet state minimum liability coverage requirements where the rental takes place. This includes:

• Bodily injury liability
• Property damage liability
• Uninsured motorist coverage
• Personal injury protection (in no-fault states)

For example, Florida requires:

• $10,000 bodily injury per person
• $20,000 bodily injury per accident
• $10,000 property damage liability
• $10,000 PIP

Peer to peer platforms satisfy these baseline amounts. Higher limits may be available. Collision and comprehensive are optional.

How Much Does Peer to Peer Insurance Cost?

Insurance costs vary by company. With Turo, owners pay 25% of each rental fee for coverage. Getaround charges owners a 40% fee. Owners can pass along some insurance costs to renters through daily rates.

For renters, peer to peer insurance costs are bundled into rental fees. Daily fees to rent a car may range from $25 to $100 in most markets, including insurance. Additional liability and deductible options change the rate.

Pros of Peer to Peer Car Sharing Insurance

There are some useful benefits of insurance provided through peer to peer services:

For car owners:

• Coverage when personal policy won’t apply
• Protection from liability claims and property damage
• Ability to earn income renting vehicles

For renters:

• Meets state minimum liability requirements
• Secondary collision/comprehensive coverage
• Alternative to costly traditional rental car insurance

Peer to peer insurance gives owners coverage flexibility while giving renters financial protection.

Cons of Peer to Peer Car Insurance

A few drawbacks to consider include:

• Personal auto policies unlikely to cover owners
• Gaps between rentals with no coverage
• Limited ability to choose specific liability limits
• Rental restrictions and approval requirements
• Deductibles for claims

The limited framework of peer to peer insurance may not match every owner or renter’s needs.

Tips for Peer to Peer Car Sharing Users

These tips help ensure proper insurance coverage using peer to peer platforms:

• Review all insurance options before listing or renting a vehicle.
• Understand liability limits and physical damage deductibles.
• Clarify with your insurer whether your personal policy excludes rentals.
• Use a credit card that provides rental car coverage as a backup.
• Take photos showing the car’s condition at pickup and dropoff.
• Report any new damage that occurs immediately.
• Make sure coverage never lapses between rentals if listing a car.

Getting answers to key questions upfront prevents insurance gaps.

The Bottom Line

Peer to peer car sharing services like Turo and Getaround provide convenient and affordable car rentals. But they also come with unique auto insurance implications.

It’s crucial for owners and renters to verify their coverage from both personal and peer to peer policies. Understanding the framework of liability and physical damage protection is also important when listing or renting a shared vehicle.

With proper precautions, owners can safely rent their cars peer to peer while renters can use these services with insurance coverage peace of mind.