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To your insurer, a Zipcar is not a rental car


A

Question: Will my car insurance company extend my coverages to a Zipcar or another car-sharing vehicle the same as it does to a rental car?  I’m trying to figure out the differences between car-sharing services and rental cars.

Answer:  Car insurance policies usually don’t extend coverages to a car-sharing vehicle as they will for a rental car, but that may be fine for your needs since car-sharing programs normally include insurance in the cost of using a car. 

Car insurance company guidelines and policy terms vary greatly from one insurer to the next, so we cannot say for certain if your policy extends to a car borrowed from a rental car agency or a car-sharing company. To find out what your particular policy allows, review it and then call your agent with any questions. Here, though, is general information we can share on this topic.

Most car insurance policies allow your policy’s coverages to extend to rental vehicles.  Your bodily injury liability and property damage liability coverages typically are in effect up to the maximum limits you have purchased as part of your policy.  This allows you protection if when driving the rental car you damage someone’s property or injure someone outside of the vehicle.

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Your collision and comprehensive coverage will also normally follow you to a rental car.  As long as the car you’re renting is similar to the car you own, these physical damages coverages should be adequate if the rental is damaged in a covered event.  (See “Does your car insurance cover an exotic rental?”)

Car-sharing services, like Zipcar, are a different because you don’t need your own auto insurance policy to extend to the vehicle to be covered.  Auto insurance, in the form of $300,000 per accident combined single limit third-party liability coverage, is automatically included in the cost of using a Zipcar vehicle for drivers 21 or older. 

Drivers under 21 get less coverage; it’s reduced down to minimum state-required limits.  The car itself has physical damage coverage on it under a comprehensive vehicle collision policy.  (See “Am I insured if I rent a Zipcar?” for more in-depth information.)

If you borrow a car from RelayRides, a popular peer-to-peer car-sharing service, it carries a $1 million liability insurance policy that protects the owner from third-party claims for injuries and property damage.  For the car borrower, RelayRides includes a supplemental protection with $300,000 worth of liability coverage and secondary comprehensive and collision coverage. 

It’s great news that for the price of the car-sharing service you get insurance, because personal car insurance policies have started to specifically list that they won’t cover you in such vehicles.

My own personal auto insurer noted in my latest renewal documents that there is no coverage extended (under liability coverages, physical damage coverages, medial payments or uninsured/underinsured motorist coverage) while “any motor vehicle is operated, maintained or used as part of personal vehicle sharing facilitated by a personal vehicle sharing program.” 

Rental cars and car-sharing programs are looked at differently by auto insurers. Before borrowing or renting a vehicle from anyone, I always recommend contacting your car insurance company to clarify what is and isn’t covered.  If your car insurance company doesn’t cover rental cars, shop around. There are plenty that do without raising your rates.

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