Turo is a peer-to-peer car-sharing platform that allows car owners to rent out their vehicles to others. It has often been described as the “Airbnb for cars.” But does USAA, one of the largest auto insurance providers in the U.S., cover vehicles rented out on Turo? This is an important question for USAA customers considering putting their cars on Turo’s platform.
|Does USAA Auto Insurance Cover Turo
In short – standard USAA auto insurance policies do not provide coverage for vehicles rented out on Turo. However, Turo does provide some supplemental insurance options to help fill in the gaps. Keep reading for more details on how Turo’s insurance works, USAA’s coverage limitations, and some things to consider if you’re a USAA customer with a car listed on Turo.
What insurance does Turo provide?
For hosts (car owners):
- Liability insurance – Covers bodily injury and property damage to third parties, up to state minimum liability limits, if the Turo host’s car insurance doesn’t apply.
- Physical damage protection – This covers damage to the vehicle you rent, with deductible options from $500 to $3,000. Takes the place of collision/comprehensive when using your car insurance isn’t an option.
- Liability insurance – Provides minimum liability coverage mandated by the state where car is rented.
- Uninsured/underinsured motorist – Protects against bodily injury costs caused by a driver with no or insufficient insurance.
- Personal injury protection – Covers medical payments regardless of fault.
- Roadside assistance – Up to $3,000 per incident.
What does standard USAA coverage exclude?
Most personal standard auto policies with USAA have exclusions for “commercial use” of your vehicle. This applies when you use your car to transport passengers or goods for a fee. Renting out your car on Turo is considered commercial use and risks the denial of a claim.
Specifically, coverage for physical damage and uninsured motorists would likely be declined by USAA if you made an injury, collision, comprehensive, or UMI claim on your permanently borrowed vehicle while it was actively rented out on Turo.
The renter’s protection options offered through Turo are intended to serve as secondary coverage, but there are still liability risks the Turo protections don’t address.
What factors should USAA members consider before listing their cars on Turo?
If you have a personal USAA insurance policy, make sure to think carefully before putting your car on Turo’s platform. Here are some things to weigh:
Increased risk – Renters may not treat the car as well as you would, raising chances of damage, high mileage, etc. Also, consider theft risks depending on renter screening practices.
Liability gaps – If an incident exceeds the policy limits of Turo’s supplemental protections, the injured party could pursue legal action directly against you if you own the vehicle. Turo provides contingency liability protection but reviews claims on a case-by-case basis.
Earning potential vs. hassle and wear and tear – Take into account the time and effort it takes to coordinate vehicle exchanges, cleaning, maintenance, etc. Is it worth it for the potential rental revenue you could earn? Crunch the numbers.
USAA rate increases – Frequent damage/liability claims could result in higher insurance rates or cancellation, even if the incidents happen while your car is rented out against USAA’s recommendations.
Availability issues – Having your personal car occupied by a renter may be inconvenient if you suddenly need access for your own transportation needs.
Tax implications – Speak with a tax professional to understand tax obligations as a car-sharing host. You may need to report Turo earnings as taxable income.
The bottom line: USAA warns policyholders that standard auto policies don’t extend coverage to cars listed on Turo. While Turo’s protections help fill in some gaps, USAA members should carefully weigh if the risks are worth the potential revenue before jumping into peer-to-peer carsharing through Turo’s platform and listing their personal vehicle.