Insurance Repercussions for Renting Out Your Vehicle

do you need car insurance to rent a car

Lending a car on occasion to a friend in need, for a brief period of time, is one thing. Many drivers find themselves faced with this situation at some point in their lives.

It is something else entirely, though, to rent your car to strangers through a car-sharing app or by other means. And it could have grave consequences for you if you do rent out your vehicle and it’s involved in an accident. These are a few things to consider before becoming involved in car-sharing services like:,,, and other similar options.

Liability Implications

The liability implications of having someone else, anyone else, drive your vehicle are substantial. Most policies have a limit of one million dollars in liability coverage (this includes legal fees and court costs) and people aren’t as careful when driving other people’s cars as they are when driving their own.

More importantly, though, your personal insurance coverage may not extend to your vehicle if you rent it out through a car-sharing service. This leaves you on the hook for court costs and coming up with the funds for any settlements or judgments awarded against you if someone is injured or killed – or has property damaged – by someone driving your vehicle.

Coverage Not as Advertised

Another problems consumers are facing when trusting car sharing services that promise insurance coverage for your vehicle if it is shared through their platform is that the insurance doesn’t quite live up to the car owners’ expectations.

In one instance reported in The New York Times, there was even argument over whether the car sharing services coverage would apply if someone not on the rental agreement was driving the vehicle. The problem is, once you hand the keys to your car over, you really have no control over who is driving it and could potentially be on the hook for that particularly liability even when you think you are properly protected.

The biggest problem consumers face when it comes to car-sharing programs like this is that insurance laws have not yet caught up to the reality of car-sharing services. This means that it’s uncharted territory and no one wants to be the one to go blindly into these troubling legal and financial waters.

It is best to err on the side of caution – especially when such large settlements and judgments loom large on the horizon. Before you consider participating in a car sharing service, talk to your independent insurance agent to discover the facts.