Renting out your car through an app can look like easy extra income. You list the car, a stranger books it and the money arrives while the car would otherwise be sitting in the driveway. But there is a quiet problem hiding in that arrangement: your regular car insurance may not cover the car while it is being rented. This page explains why, what protection is available and what to check before you list your car on Turo, Getaround or a similar service.
Why your personal policy may not cover it
A personal auto policy is written for personal use. When you rent your car out for money, insurers often treat that as commercial use, and many personal policies exclude it. In plain terms, if someone is driving your car on a booking and has an accident, your own insurer may refuse to pay. Several of the large insurers say this directly. Some may go further and cancel or refuse to renew a policy if they find out you have been renting out your car without telling them.
This is different from lending your car to a friend or relative, which your policy normally allows. The key difference is that the car is being offered to the public for a fee. Our article on whether insurance follows the car or the driver explains how ordinary borrowing is treated.
What the platform provides
Car-sharing platforms know about this gap, so they offer their own protection. Hosts are usually required to choose a protection plan, with several tiers, that covers the car while it is on a trip. These plans typically include some liability coverage and some physical-damage coverage for the car, with different limits, deductibles and host earnings depending on the tier. Details change over time, so read the current terms for your plan.
Two points are worth understanding. First, these plans are often described as protection plans or contracts rather than insurance policies, and their rules are not the same as an insurance policy’s. Second, a plan applies during a trip, not necessarily at other times, such as when the car is parked between bookings, being cleaned or in the shop. Your own coverage still has to handle those periods.
Commercial car insurance for hosts
Some hosts, particularly those with several cars, buy a commercial auto policy that covers rental use. Commercial coverage can protect the car both during trips and between them, and many platforms let a host decline the platform’s plan if the host has an acceptable commercial policy. The trade-off is that a commercial policy is usually meant only for the rental vehicle, not for personal use, so it makes sense for a car you use only for hosting. Our page on commercial auto insurance explains how this works, and the pages on rideshare insurance and delivery driver insurance cover related situations.
If you are the renter
Renting a car through an app is not the same as renting from a traditional company. Your personal policy might extend to the rental, but many do not, and many credit card benefits also do not apply. Before you decline the platform’s protection plan, call your insurer and ask whether your policy covers peer-to-peer rentals. If you are not sure, buy the plan. Our guide on borrowed and rented cars explains how coverage works for ordinary cases.
Questions to ask before you list your car
- Does my personal policy exclude renting my car out? Ask in writing.
- Will my insurer cancel or raise my price if I host?
- If I have a loan or lease, does the contract allow renting the car? Many do not. See leased car insurance.
- What are the liability limits and deductibles on the platform’s protection plan?
- What is covered between trips, and who pays for cleaning, smoking, tolls and tickets?
- Does my state have rules for peer-to-peer car sharing?
What to do if there is an accident on a trip
- Make sure everyone is safe, and call 911 if anyone is hurt.
- Report the incident to the platform right away through its claims process. Do not rely on your personal insurer.
- Take photos, collect the other driver’s details and ask for a police report.
- Keep records of the booking, messages, photos taken at pick-up and drop-off and every receipt.
Our guide on how to file a car insurance claim explains the general steps, though the platform’s process will decide who pays.
Is it worth it?
Hosting can make money, but the numbers need to include insurance, wear and tear, cleaning, depreciation and the risk of a large loss. A single serious accident can wipe out months of earnings, and a damaged car can be out of service for weeks. Think about whether you could afford the deductible. If you are not sure, read our articles on how to choose a deductible and how much car insurance you need.
Common questions
Do I still need my own car insurance if I host? Yes. Platforms generally require a personal policy, and you need it when the car is not on a trip.
Will my personal policy pay if a renter crashes? Usually not, because of the commercial use exclusion.
Do I have to tell my insurer? It is wise to ask, since hiding it could lead to a denied claim.
Can I decline the platform’s plan? Sometimes, if you have an acceptable commercial policy. Check the platform’s rules.
A few phone calls before you list the car can prevent a very expensive surprise. Compare quotes and tell each company exactly how you plan to use the car.
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This page is for general information only and is not insurance, legal or financial advice. Coverage, rules and prices vary by insurer and state.