Although I’ve been a member of Turo (formerly RelayRides) for a long time, next week is my first time using them. Turo is like the AirBnb of cars. When you’re not using your vehicle, you can rent it out through their platform to make extra cash. They help you locate drivers, provide valet lots at major airports like SFO where you can leave your car to get rented out for extended periods, and cover you with insurance.

The last bit is the interesting part: insurance. While they provide a $1M liability policy to owners, damage coverage starts to get confusing. It’s taken me a couple of days to unravel some of the ins and outs, so I’ll walk through what I found.

Coverage for Renters

As a renter, Turo offers you three protection plans: Premium, Basic, and Decline Coverage. This may sound familiar if you’ve rented a car from a traditional agency like Hertz recently and declined the Loss Damage Waiver. Often, your credit card has benefits that cover you in the event of an accident, so rental agency coverage is added cost and redundant (particularly for cards with primary coverage, not secondary, like Chase Sapphire Reserve). However, since Turo is a fairly new model, where the cars are not part of a commercial fleet, most credit card companies do not consider them covered under the rental insurance benefit. I called Chase and verified that Turo is an exception to their policy.

Warning #1: Do not assume your credit card coverage applies, it most likely does not.

Ok, so how about those options through Turo? Premium has a deductible of $500, while Basic has a deductible of $3000 and Decline can go up to the full value of the car. Wait, what? Yep. Dire warnings everywhere about full replacement value of that expensive car you just rented for the weekend. And unfortunately, Turo’s options are pretty pricey – 40% of the rental cost for Premium, and 15% for Basic.

Now, if you have a personal auto policy with collision coverage, it should cover you from major charges. You’d simply file a claim with your own insurance and pay your deductible. Turo recommends contacting your insurance provider directly to confirm coverage. I kicked off an email to my provider with that question, Allstate, and consumed my local agent’s afternoon with the volume of email and voicemails she got from Corporate escalating upward through “claims specialists” who had no idea what Turo was or how it would be covered. After a lot of back and forth, they confirmed I’d be covered on my policy in the same way I’d be covered with a traditional rental agency.

Warning #2: Don’t assume your personal auto coverage applies, although it probably does. Get it in writing from your insurance agency.

So all is good, right? Not so fast. Turo also reserves the right to charge you claims processing fees up to $575, on top of the deductible you’d be paying your personal insurance agency while watching your premiums rise. And if you don’t have collision coverage, or don’t have a personal auto policy, you don’t have damage coverage.

Coverage for Owners

You may be wondering at this point how things work for owners (I was). As an owner, Turo gives you an option of three protection plans: Premium, Standard, and Basic, and a fourth exception with no coverage, Owner-provided. Each provides $1M liability and “physical damage protection” up to $125k, the owner keeps less and less of the rental fees as they spiral up the tiers. (Turo skims 10% off the top for owner-provided, 15% for Basic, 25% for Standard, and 35% for Premium.) Basic has up to a $3000 deductible, while Standard and Premium have $0 (no out of pocket costs for damage).

So with Turo’s coverage for owners under their own policy, why are they also warning renters of their liability? Totally unclear to me, and to my agent, who isn’t sure how primary/secondary coverage would get processed in the event of a claim. Turo’s examples are way too vague and not at all clear on resolution, other than stating that they will first seek restitution from the renter’s insurance policy AND charge a $500 processing fee.

From Turo’s support site:

“Step 1: If either the renter or an at-fault third party has insurance coverage, we will seek reimbursement from their insurer. Renters may be asked for assistance during this process. Renters will still be liable for associated processing fees and their personal deductible.

Step 2: Turo will charge the renter any balance due, based on the protection package selected.”

Their overall model seems like double dipping to me: charge both the owners and the renters for coverage plans, charge for any actual claims processing work, pocket profit on the vast majority of uneventful rides. Further, if the owner’s vehicle has provided their own commercial insurance, Turo won’t even get involved in the claims process, you must work directly with the owner and their agency and Turo absolves themselves of all responsibility.

All in all, I like the idea of Turo, but they are really shirking their responsibility to their customers. They need to step up to the plate and find a simplistic way to offer a “Worry-Free Guarantee” across the board. Otherwise there will be more dissatisfied owners with wrecked cars or renters with horror stories.

Update August 7, 2017: I rented with Turo and did not crash the car, so unfortunately, no new information to impart to the world on that front. The Turo Valet Lot for San Francisco is great – open 6 am to 10 pm, friendly agents, and they take a ton of pictures of the car’s condition (37 just for pickup!). It felt much more professional than picking the car up from the owner directly and snapping a few shots on my phone.

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