Whether we like it or not, the “gig economy” is growing. And as these gig companies grow, new issues and industries are coming up with them. If we were to read about this in a family tree sort of way, it might go something like, “rental cars begat Zipcar, which begat ride-sharing, which begat car-sharing.” So what can we expect as the offspring of car-sharing? Car-sharing insurance, naturally.
Services like Turo and Getaround allow vehicle owners to rent their cars to other drivers via an app. In turn, drivers have access to any number of vehicles they can reserve. It’s kind of like Airbnb for cars and trucks.
While this can have advantages, it comes with some dangers as well. Sharing a car adds complications to insurance claims and can give you problems if there is ever an accident.
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Enter peer-to-peer car sharing insurance. Created in an attempt to address these new elements of the driving world, it wipes away some of the concerns.
With multiple sides of the car-sharing service, it is worth asking who is responsible for buying the coverage and who is accountable in case of accidents. Let’s clear up some of the questions you may have.
What to know about car-sharing insurance
The first thing to understand is that if you are renting a vehicle through a car-sharing service, there is a good chance your existing car insurance won’t cover you. That means you’re responsible for any accidents. While this may not always be the case, many companies include language in their agreements to separate themselves from car sharing. Always be sure to understand where you fit within these guidelines.
Typical insurance will probably not cover you renting your vehicle out to others unless you have commercial insurance instead of a personal policy. Many insurance companies are getting into the game of new coverage with more mainstream services like Lyft and Uber, but this does not translate to widespread inclusion for car-sharing just yet.
Both Turo and Getaround offer peer-to-peer car-sharing insurance policies. Still, these policies’ effectiveness in protecting you from liability is not the same as your typical car insurance. There may be much higher deductibles, which means you pay much larger amounts out of pocket for any accident or damage that happens to the vehicles you are either driving or sharing with others.
Do you even need car-sharing insurance?
Car sharing insurance could be a good idea for you to get the added coverage, but the necessity is on a case-by-case basis. You should talk with your current car insurance provider to see what kind of coverage they extend in your plan and what you can do to expand that coverage if needed.
In some cases, simply upgrading from a personal policy to a commercial policy could expand your coverage to give you just what you’re looking for. If your insurance company doesn’t have any way to help you, extend the search to other car insurance companies.
Either way, exploring your options is valuable given the high potential costs of accidents.
Have you used peer-to-peer sharing services like these? How was your experience?
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