When you become a Turo host, you operate in a complicated insurance environment. Turo provides protection for physical damage and liability during a booked trip (what they call Period 3). Yet, Turo requires every host to keep their own personal auto insurance policy for the vehicle.
The biggest financial danger for a Turo host is not the guest's driving; it's the chance that your personal insurer will deny a claim or, worse, cancel your entire personal policy when they learn you are using the car for profit. This risk affects your long-term financial stability far beyond the single vehicle listed on Turo.
Why You Must Keep Personal Coverage for Turo
Turo is not an insurance company; their host protection plans are a contractual allocation of risk and reimbursement system, not a primary insurance policy in the traditional sense.
That means Turo's coverage for your car is not like the policy you buy from Geico or State Farm.
Think of it this way:
- Your Personal Insurance: This is a legally recognized, state-mandated contract that follows standard insurance laws. It's designed to protect you from the moment you own the car until you sell it, with specific exclusions.
- Turo's Protection Plan: This is an agreement between you and Turo, the platform. Turo promises to reimburse you for damages (minus your deductible) under very specific conditions (only when the car is rented and damage is properly reported). It does not fulfill the legal requirement to have auto insurance.
So, Turo is helping you pay for the damage, but they are not the official insurer covering the vehicle's legal liability when it's just sitting idle or when you are driving it yourself. You must keep your regular personal policy running at all times to avoid breaking the law.
Reason #1: The Registration Gap (Period 1)
All US states require vehicles to be legally registered and insured. Your Turo vehicle must have an active, current personal auto policy to meet state requirements when it is sitting idle, parked in your driveway, or being used for personal errands. Turo's coverage does not apply when the car is not on an active trip. If you cancel your personal policy, you are violating both state law and Turo's terms of service, which would void your protection plan entirely.
Reason #2: The Off-Trip Gap (Period 2)
There is a gap in coverage when you are driving the car for business purposes, such as:
- Taking the car to the mechanic or car wash.
- Driving to meet a guest for pickup or drop-off (if delivery is offered).
- Cleaning or preparing the vehicle between trips.
In these "off-trip" scenarios (Period 2), your personal insurance is what should cover the vehicle. This is where the risk begins because almost all personal policies exclude this exact use.
When Your Policy Will Fail You
The vast majority of standard personal auto insurance policies include a clause that excludes coverage for commercial activity or "for-hire" use. Your intent to earn money puts your vehicle outside the definition of "personal use" that your contract covers.
If you file a claim with your personal insurer for an accident that happens during Period 2 (e.g., a minor accident on the way to the car wash), and the insurer discovers you are a Turo host, they have two common responses:
- Claim Denial: They deny the claim because the loss occurred during a commercial activity excluded by the policy. You are left paying the repair costs out of pocket, which can be thousands of dollars.
- Policy Cancellation: They immediately cancel or decline to renew your entire auto policy (sometimes for all vehicles you insure with them) because you violated the "commercial use" clause.
This is a terrible situation. Losing your long-term, stable personal auto insurance policy forces you into the high-risk, much more costly insurance market. Your future insurance rates, even on vehicles you don't host, could skyrocket four times or more.
Misrepresentation Risk
Some hosts try to bypass this risk by simply not telling their personal insurer they host on Turo. This concealment is termed "material misrepresentation" in insurance contracts.
If the insurer discovers this deception during a claim investigation (e.g., from repair shop records or social media posts), it may be viewed as fraud. This nearly always results in a claim denial and permanent policy cancellation. Insurers even cross-check VINs on file with Turo's listings to proactively identify and cancel policies.
The Solution: Three Ways to Stay Compliant
You have three options to operate safely and stay compliant with both Turo's requirements and state law. The best path for you depends entirely on the size of your operation and how much risk you are willing to handle.
Option 1: The "Hybrid" Personal Policy
A small number of national carriers (like State Farm in certain areas, or specialty local brokers) offer hybrid endorsements. These are written additions to your personal policy that explicitly allow for peer-to-peer car sharing. This is the clearest solution for a new host with one car.
- Action: Contact your agent and request written proof that your policy covers the car when it is not being rented but is being used for Turo-related business activities (Period 2). Verbal confirmation is never sufficient proof. You must get the official policy language or an endorsement document in writing.
Option 2: Turo Protection Plans + Standard Personal Policy (The Default Risk)
This is the standard starting point for most hosts. You maintain a personal policy for Periods 1 and 2, and rely on Turo's chosen plan (ranging from 60% to 90%) for Period 3 (on-trip) coverage.
This setup relies heavily on your personal insurer being a Turo-friendly company that will not penalize you for commercial use during Period 2. If they are not Turo-friendly, you run the risk of claim denial and policy cancellation mentioned in the previous section.
Option 3: Commercial Off-Trip Policy (The Fleet Solution)
For hosts with multiple vehicles, the safest and most profitable option is a commercial off-trip policy (like Tint or ABI Period X). This policy is the professional standard for scaling hosts.
This policy effectively replaces your personal auto policy for the Turo vehicle. It is explicitly designed to cover all business use (Periods 1 and 2) but excludes personal use. It removes the risk of denial or cancellation from a personal carrier and satisfies state registration requirements. Commercial policies are often designed to be issued directly to an LLC, simplifying your business structure.
The Takeaway
Do not assume your personal policy protects you. Calling your agent and asking the direct question—"Does my policy cover my vehicle when it is used for a peer-to-peer car sharing business, including driving it to the car wash between trips?"—is the single most necessary step you can take to protect your Turo income and your personal financial stability. Your continued business success depends on resolving this insurance question before your first booking.
Frequently Asked Questions (FAQ)
Does Turo require me to have my own personal insurance?
Yes. Turo requires all hosts to meet state-mandated minimum coverage requirements for the time the vehicle is not on a trip.
If an accident happens during a trip (Period 3), does my personal insurance cover it?
Turo's liability coverage is generally primary during the trip, yet most personal policies will deny the claim due to the commercial use exclusion, leaving Turo's protection plan to handle the damages.
Is Turo's liability coverage primary or secondary?
Turo's liability is typically secondary to any other coverage you or the guest might have, except in states like New York, where Turo's liability is primary.
Can I get in trouble for canceling my personal insurance once I list the car on Turo?
Yes. You are legally required to maintain insurance to keep the car registered. Canceling your personal insurance violates Turo's Terms of Service and state law, leading to voided Turo protection and legal penalties.