Why Personal Insurance Often Won’t Help
Here’s the blunt truth: most personal auto policies explicitly exclude “commercial use,” which includes peer-to-peer car sharing. When you rent your car on Turo, insurers view it as a business transaction, not a personal drive to the grocery store.
I actually called my State Farm agent to confirm:
“So if I rent my car to someone through Turo…”
“Stop right there. That’s commercial use—no coverage.”
Most major carriers—State Farm, Allstate, Progressive, Geico—take the same stance. That gap between what you think is covered and what actually is covered creates a nasty surprise if a claim arises.
The “Turo Gap” Explained
I call it the “Turo gap.” It’s the period during which you believe you’re insured, but you’re really not. Your personal policy covers you when you drive, but once a guest takes the wheel under a rental agreement, your personal policy usually steps aside.
Coverage during your personal use
Normal claims—comprehensive, collision—are handled by your personal insurer when you’re behind the wheel.
Coverage during a Turo trip
Only Turo’s protection plans apply. Your personal insurer won’t touch it.
How Turo’s Protection Actually Works
Turo protection is designed specifically to fill that gap. Coverage activates the moment a trip starts and ends when the car is returned. No commercial-use exclusions, no surprises.
All Turo protection plans include:
- $750,000 in liability coverage (up to $1.25M in New York) through Travelers Excess and Surplus Lines Company
- Physical damage coverage up to the vehicle’s actual cash value or $200,000, whichever is less
- 24/7 roadside assistance for flat tires, lockouts, dead batteries, towing
- Theft protection and vandalism coverage
Unlike your personal policy, Turo’s protection is active throughout the rental period—exactly when you need it.
When You’re Not Hosting: The Dual-Insurance Reality
This is where it gets a bit ironic: as a host, you actually need two insurance solutions:
- Personal auto insurance for your own driving and off-trip use.
- Turo protection plan for when your vehicle is rented out.
Some hosts try to rely solely on Turo protection and skip personal insurance—but that leaves you exposed when you drive the car yourself or when it’s not on an active rental.
The Renter’s Side: Guest Coverage Grey Areas
If you’re renting on Turo, your personal insurance might cover a Turo trip under “temporary substitute vehicle” terms—but many policies explicitly exclude peer-to-peer rentals. You often don’t find out until you file a claim.
Here’s a quick breakdown:
When personal insurance might help:
- Comprehensive policies that mention “temporary substitute vehicles”
- Certain premium insurers (USAA, some regional carriers) with peer-to-peer add-ons
When it won’t:
- Liability-only policies (no physical damage cover)
- Policies with specific peer-to-peer exclusions
- Most standard personal auto policies
If in doubt, assume your personal policy won’t cover a Turo trip. Better safe than sorry, right? Explore Turo’s guest protection options before you decline coverage.
Real-World Scenarios
Let’s walk through a few actual situations I’ve seen:
Scenario 1: Host with Personal Insurance Only
Sarah hosts her Camry, declines Turo protection, relies on Allstate. Guest causes $2,800 damage. Allstate denies due to commercial-use exclusion. Sarah pays $2,800.
Scenario 2: Host with Turo 80 Plan
Mike uses the 80 plan. Same $2,800 damage. He pays $750 deductible, Turo covers $2,050.
Scenario 3: Guest with Comprehensive Personal Coverage
Jenny rents, declines Turo coverage, her policy covers temporary substitute vehicles. Accident causes $1,500 damage. She pays her $500 deductible; insurance covers the rest.
Scenario 4: Guest with Liability-Only Policy
Tom rents, declines coverage, has liability only. $1,500 damage. Liability doesn’t apply to physical damage. He pays full $1,500.
Cost Comparison: What You’re Really Paying
Personal auto insurance can run $100–200/month depending on your profile. But it covers only personal use.
Turo protection comes “built-in” via trip earnings share:
- 60 plan: Turo takes 40% of trip price
- 75 plan: Turo takes 25%
- 90 plan: Turo takes 10%
On a $100/day rental, that’s $10–40/day for coverage. More than personal insurance? Yes—but it covers the commercial-use gap that personal insurance won’t touch.
Commercial Auto Insurance: An Alternative?
Some hosts consider full commercial auto policies. But these often cost $200–400+/month and still require insurers willing to cover peer-to-peer activity. Not easy to find, and usually not cost-effective for most hosts.
Exception: large fleet operators (10+ cars) who can spread costs across many vehicles and rentals.
Key Takeaways
For Hosts: Don’t rely solely on personal auto insurance. You need Turo protection for every trip. Skipping it is a risky gamble that rarely pays off.
For Guests: Confirm with your insurer if they cover peer-to-peer rentals. If not, choose one of Turo’s protection plans—Standard is a solid middle ground.
Insurance isn’t fun until you need it. Then it’s the most important thing in the world. Don’t learn the hard way like Jake did—be informed, choose wisely, and stay protected.
For a complete overview of Turo insurance and how it all fits together, check out our comprehensive Turo Car Insurance Guide and learn exactly how much you’ll pay in deductibles.