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posted on April 7th, 2016

*Editor’s note: This post is applicable to US owners only. For more info on our Canadian insurance offering, click here.

Our owner community has been asking for more flexibility when it comes to coverage, so last month we unveiled three tiers of vehicle protection.

While damage during a rental is rare, all our new vehicle protection plans come standard with $1 million in liability insurance and physical damage coverage up the car’s actual cash value (up to $75,000), so nothing’s changed there. But here’s a rundown of what’s new, and what owners can now choose from.

Standard

The Standard plan is the default option and offers the solid protection that owners in the Turo marketplace have always had, including liability coverage and physical damage protection. The physical damage piece includes comprehensive and collision damage, but does not include wear and tear or loss of rental income. For any covered damage, there is no deductible, and Turo will provide you with a replacement vehicle.

Owners who choose this plan take home 75% of each trip price. (For quick definitions of wear and tear and loss of rental income, see the glossary below, with more specific definitions in our support article).

Premium

For owners who want a little more peace of mind, the Premium plan covers exterior wear and tear and loss of rental income if your car ever needs repairs due to damage during a trip. As with the Standard plan, there’s no deductible for any covered damage, and Turo will provide you with a replacement vehicle.

With this plan, owners pocket 65% of each trip price.

Basic

The Basic plan lets owners share some of the risk to pocket more earnings. It covers neither wear and tear nor loss of rental income, and it also has a shared deductible: Turo pays 20% of the first $3,750 of damage costs to your car, and 100% after that. Owners retain 85% of each trip price.

This plan is a little riskier, since the owner will bear the costs of up to $3,000 for any damage to the car.

Before choosing your plan, do a cost-benefit analysis to determine which would work best for you and your rentals. You can enroll in a new plan at any time — but any change you make will only apply to future trip requests.

Glossary

Here are some simplified definitions of knotty insurance terms to help you understand the ins and outs of our protection offerings; more detailed definitions are available in our support articles.

DEDUCTIBLE

Traditionally, a deductible is the amount a car owner must pay for an incident before their insurance starts paying. In the Turo context, there is only a deductible in the Basic option, and Turo shares the cost with the car owner from the get-go.

LIABILITY

Liability insurance protects you against claims from other parties for their injuries or damage to their property that happened when you were delivering the car, or during your guest’s rental period. So if your guest injures someone, you’ll be protected by $1 million, so you can rest easy knowing you’re well protected.

LOSS OF RENTAL INCOME

Loss of rental income means the potential earnings that you’re losing while your car is being repaired due to covered damage. Our claims team will calculate your loss of rental income by averaging your earnings history and applying the daily average to the number of days your car is at the repair shop. We’ll then compensate you the amount you potentially missed out on. This additional compensation is only available with the Premium option.

PHYSICAL DAMAGE COVERAGE

Physical damage protection is financial protection if your car is involved in a collision (when two cars hit each other or when a single car hits an object) or most comprehensive events (like theft and fire) during the rental period.

TURO FEE

The Turo fee is the percentage that Turo keeps from each of your rental transactions. Our fee for our Standard plan is 25%, so if the trip price was $100, you walk away with $75.

WEAR AND TEAR

Wear and tear may be thought of as the normal damage that occurs on your vehicle from regular use. Our Premium plan covers external wear and tear. Wear and tear isn’t covered by our Standard and Basic plans.

Questions?

Insurance can be a confusing topic, so please explore more detailed information on our new vehicle owner protections plans, read the documentation on “Your car” page, or go to support.turo.com if you have more questions.

Chris Aragon is the senior claims manager at Turo. He retires from playing golf at least once a year and loves to spin a good yarn about history's most misunderstood events (when he's not thinking about insurance).