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The risks of peer-to-peer car rental insurance

The peer-to-peer car rental marketplace is quickly making an imprint in the already rapidly growing sharing economy. Often referred to as ‘the Airbnb of car sharing’ – the peer-to-peer car rental marketplace is a sharing economy business model where you can generate income by renting out your personal vehicle to an online community of individuals seeking to rent cars for short-term travel. But what does this mean for your vehicle and liability when your car is being rented out?

Peer-to-peer car insurance – are you covered?

Generally, If you are making money off of your vehicle using a car-sharing company – whether you rent it occasionally for weekends or every day of the week – insurance providers view this as a commercial venture which means that your insurance and liability changes from personal to commercial. Using your vehicle to generate money will require, at the minimum, notifying your provider. 

The vast majority of standard personal auto insurance providers will void your personal vehicle Ontario insurance coverage if you attempt to file a claim for an incident that occurred while using your private vehicle for commercial purposes. For this reason, many peer-to-peer carshare companies have partnered with insurance companies to provide temporary commercial insurance while your vehicle is rented out through their platforms. 

Most carsharing companies do provide insurance coverage through partnerships with large commercial insurance providers. This is significant for Ontario because as of 2016, the Ontario Government approved a regulatory change under the Insurance Act to allow commercial fleet insurance to be offered for vehicles that can be hired through online apps. With the regulatory change in 2016, car insurance companies can now develop policy products specifically for purchase by ride-share companies. This regulatory change effectively closed the gap in auto insurance coverage for those drivers carrying paying passengers through ride-sharing services.

Currently, the Financial Services Regulatory Authority of Ontario (FSRAO) authorized insurance products for peer-to-peer car-sharing companies such as Outdoorsy, ShiftRide, And Turo.  

The largest – and the most widely used of the above companies throughout the GTA and Ontario is Turo. Let’s have a closer look at how they insure their customers.

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Turo rental requirements and insurance protection

Those who are renting a car through Turo do not require their own personal auto insurance. Turo, much like other popular carshare companies will provide coverage for the guest. Turo holds a partnership with Intact Insurance, and their direct insurer, BelairDirect, which offers temporary commercial coverage for both you and your guests or renters. The policy covers you car from when you turn on your app and deliver your car, and then up to the second your vehicle is out of the delivery period. Turo offers car owners a $2 million commercial insurance policy whenever the car is rented through the Turo platform/app. 

Turo’s coverage includes $2 million in liability coverage, accident benefits, and protects your car from physical external damage. Under this insurance plan, your car will be protected during the delivery period and in-use by a renter. When your car is not in use by Turo (eg: outside of the Delivery Period and Rental Period) – your vehicle reverts back to your personal car insurance coverage.

On the other hand, according to Intact, during the delivery and rental periods, the commercial insurance policy provides the following coverage:

  • Third-Party Liability with $2,000,000 limit;
  • Family Protection Coverage (also known as a OPCF 44R form) with $2,000,000 limit to ensure all members of the vehicle are covered;
  • Standard Accident Benefits, no Optional (or extended) Accident Benefits;
  • Physical damage (Comprehensive and Collision with $1,000 deductibles);
  • Coverage removing the insurer’s right to deduct depreciation from the value of your vehicle when settling a claim for loss or damage ( also known as a OPCF 43 form) – removing Depreciation Deduction with $1,000 deductible;
  • Coverage for you when you need to pay for other means of transportation because of loss or damage to your automobile during the rental period in the event of damage or accident  ( also known as a Coverage for Transportation Replacement or a OPCF 20 form) – with $75 limit per day and $500 limit per occurrence.

As someone renting out your car, liability for physical damage to the rented vehicle is always  “dependent on the physical damage protection package that is chosen by the guest when they book a vehicle on” This suggests that if you are renting your personal vehicle, you should always check with your personal auto insurance provider that, in the event of a claim, how you might be covered.

Bottom Line 

Whatever you choose, making the decision to share out your vehicle comes with risks – and for some of us, those risks might outweigh the benefits pending the selected coverages and type of personal insurance we might carry (or not). It’s always best to make sure that you understand your personal car insurance policy and ensure that insurance options for renting out your vehicle under a peer-to-peer platform are authorized and supported by your provider.


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