One of the most common questions new Turo hosts ask is: "What happens if a guest gets into a major accident or, even worse, uses my car for something illegal?"
When you share your car, you aren't just sharing a piece of metal; you are navigating a complex web of legal responsibilities.
In 2025, the rules have tightened.
Following recent updates, Turo has shifted more financial weight onto hosts.
Knowing the difference between Third-Party Liability Insurance and Contractual Reimbursement is now the only way to sleep soundly while your car is in a stranger's hands.
Liability Insurance vs. Physical Damage Protection
It is a common mistake to use the word "insurance" for everything on Turo. However, the platform legally distinguishes between two very different types of protection.
1. Third-Party Liability Insurance
This is "true" insurance provided by Travelers Excess and Surplus Lines Company. It protects you from legal trouble if your guest causes injury or property damage to someone else (a "third party") while driving your vehicle.
- The Limit: In most US states, every host plan comes with $750,000 in liability coverage.
- New York Exception: Because of specific state laws, New York hosts have a higher limit of $1,250,000.
2. Physical Damage Protection
Turo is very clear: this is not insurance. It is a contractual reimbursement agreement.
Basically, Turo agrees to pay for eligible damage to your car that happens during a trip, up to the vehicle's cash value or $200,000.
As of the latest updates, Turo has removed several perks from the lower-tier plans.
The "Negligence" Gap: Where You Are Still Liable
Even with the best protection plan, there is one area where you remain legally vulnerable: Maintenance Negligence.
If a guest crashes because your brakes failed or a tire blew out because it was bald, Turo’s protection plans may not shield you from a personal lawsuit. Under the latest 2025 updates, Turo has implemented a stricter safety system.
If your vehicle’s maintenance records or safety ratings fall behind, your car will be delisted. More importantly, if a maintenance issue is found to be the cause of an accident, Turo can void your protection entirely, leaving you personally liable for all damages.
Off-Trip Insurance: The Critical Safety Net
Turo's protection only exists from the "Start" to the "End" of a booked trip. What happens when you are driving the car to a car wash or a guest’s delivery location?
Most personal insurance policies have a "Car Sharing Exclusion" clause. If your insurer finds out you are using the car for Turo, they may deny off-trip claims or even cancel your policy.
The 2025 Solution: Many professional hosts now use specialized "Off-Trip" insurance. These policies cover you specifically for business tasks when the car is not on an active Turo trip, ensuring you don't lose your personal coverage for "commercial activity."