A Tesla owner shared her story with YouTuber TeslaMaster of how a Turo renter totaled her car, and it’s pretty horrific. For those who don’t know what Turo is, it’s a car rental service that allows the owner of a car to rent their car to users instead of a customer having to go through traditional car rental companies. The video not only shares the horror story of the owner of a Tesla Model 3, but goes into detail just how much money Turo is making off of its hosts.
In a nutshell, a Tesla owner rented her car out to Turo while also paying the insurance. Turo charges both the hosts and the guests insurance fees and claims that Liberty Mutual covers the car. However, one Tesla owner got totally screwed despite this supposed insurance. A guest wrecked her car and Turo is refusing to cover the claim — leaving her stuck with a totaled Model 3.
Turo also didn’t alert her to the accident but instead tried to blame her for “not calling sooner.” It was Tesla that alerted her to the accident and she started this process as soon as she knew about it.
If you want to rent your car, there’s a better way (see the last paragraph).
The Full Details
The host, unnamed in the video, bought a Tesla Model 3 in August 2018. After receiving it, she was very excited had an idea many Tesla owners have had, to list it on Turo. She’s also an AirB&B host and is supportive of the sharing economy.
“I love the sharing economy. I love the idea behind it and I have a second vehicle, so I thought maybe this is a great way. Teslas are super incredible to drive. They’re the best car out there.”
When she rented her car out on Turo, she thought everything would be great — until a guest rented her car and drove it out of state. She found out later that the guest let his son drive and he crashed the car.
“Turo decided they weren’t going to cover the claim.”
The owner of the Model 3 is pretty devastated, and I don’t blame her. When you rent your car out through a third-party service like Turo, which is making money off of your car, they should be held responsible when the car is damaged while in their possession. Although technically the car wasn’t in Turo’s possession, the person who wrecked the car wouldn’t have done so if they weren’t able to rent the car through Turo.
“I’ve been pretty devastated that the whole time I’ve been paying as a host into the insurance — which kind of surprised me after about the first year I started realizing that they were asking hosts and the guests to pay in, which I thought was kind of (…) double dipping because I didn’t understand why hosts were paying. But I definitely wanted my car protected and they tell you that you’re covered by Liberty Mutual Insurance. So I paid the full amount that was to cover the highest amount of coverage.”
She pointed out that when the accident happened, she was asked if she wanted to activate her claim, which left her confused since she wasn’t the one who crashed the car.
“So they should activate their policy and that was what we decided and then about a week into–well it took five days before Turo contacted me after the accident because I reached out to them over and over. It’s not very clear what happens when there’s an accident. I reached out. I only could get through customer service. Customer service did not know what to do. They just kept telling me I had to post pictures online.”
After calling several times, Turo eventually said that someone from claims would reach out and talk to her. After five days, someone from claims finally reached out to her.
“They were questioning why it took me so long which is weird because I literally called them 10 minutes after the accident.”
She knew of the accident as soon as it happened thanks to Tesla. Tesla alerted her and then that’s when this whole process started. When asked if she would recommend Turo to drivers she said no.
“I was really truly under the impression that I was covered. And I have been completely abandoned by Turo. Not only did they decide not to activate the policy, which I thought was what I paid into. They somewhat just haven’t even followed up. I would just advise anybody to not do it because, through my research, we realized that they truly are a car insurance company. That is how they’re making their money. They’re making the bulk of their money off of these insurance fees that they’re billing the driver and the host. They just collect them and then they choose if they are going to enter the claim to Liberty Mutual. My attorney told me that the only way they activate Liberty Mutual is if there are two vehicles involved — if there’s a second party.”
Another thing she found out is that Turo is one of the few rental companies that will rent to anyone over the age of 21. Anyone aged 21–25 pays a huge risk fee which is triple or quadruple what the average person pays for insurance, she explained in the video. Turo is taking money from the host and the driver for insurance. They take money from the renter/host due to the risk they are taking on renting out their car. And when she crashed her car, they are not giving her any of that back, which is what insurance should be for.
Starting Your Own Rental Car Business
For those who are on Turo and would like to take their car off the marketplace, here’s one way you may want to continue to rent your car. You can get a commercial insurance policy and start your own rental company. It sounds like a lot of work, but in the end, you don’t end up screwed over by a third-party app that promises to protect you.
“If you’re going to do it, I would go outside of Turo completely and use your own commercial insurance,” she said.
This actually inspired me to dive into another rabbit hole. I think that anyone reading this would probably consider going this route if they wanted to rent their car.
Upon doing a Google search, don’t fall for the ads. The first thing I saw were ads from Turo. I did find a great article by NerdWallet that helps one navigate this rabbit hole easily. The article gives you a step by step guideline. Here’s a nutshell version:
- Pick a type of rental car business.
- Independent small business (great for those moving from Turo to this field)
- Existing business.
- Determine your target audience.
- Set up your business plan. (I used LivePlan for my jewelry business.)
- Register and license your business.
- Organize your finance.
- Set up a business bank account and credit card.
- Look into outside funding.
- Find the right location.
- Create a rental contract.
- Build your operations team.
- Create an online presence.
- Provide exceptional service.
So, for a Tesla owner with an extra car, I would suggest looking into opening an independent small business, making sure you have your commercial insurance, and just going down the above list. What that list doesn’t dive deeply into is a marketing strategy. Yes, it mentioned a website, but you need to have a consistent, effective, and efficient marketing strategy.
The business plan will help you plan this. As a jewelry artisan working from home, I never thought I would use an actual business plan, but I created one with LivePlan when it was suggested to me by a couple of friends. A business plan actually helps you visualize your hobby/side gig from a different perspective and it literally forces you to think about how you’re going to market, plan your finances, and even forecast your earnings once you input data. It’s something to consider if renting your Tesla (or other vehicles) is on the brain.
But no matter what you choose to do, one takeaway from this story is: protect your assets, and check carefully what any insurance you buy actually covers.