The Turo car-sharing app is coming to NL, but how does the insurance work?
The Turo car-sharing app is coming to Newfoundland and Labrador ahead of the potential influx of tourists for the year of homecoming this summer, but big questions remain about the app’s use in Province.
The app is similar to Airbnb but for cars, allowing car owners to rent their own personal vehicle. The service has been operational in the other provinces since 2016.
Provincial government officials are touting the app as a solution to car rental shortages that have plagued the province’s tourism industry in recent years. But how does it work? And what about insurance?
“Each car must pass a safety inspection to be listed on the platform,” said Cédric Mathieu, vice president and head of Canadian operations for Turo.
“Cars must be less than 12 years old. They must have less than 200,000 kilometers on the odometer and be in good mechanical condition.”
Mathieu said car owners can download the app, list their vehicle and set the amount they want to charge. When it comes to insurance, Turo has partnered with Economical to be the interim insurance during the rental.
“Anything that happens during a Turo trip will really be covered by the insurance provided by Turo,” Mathieu said.
“And your personal insurance won’t be affected by anything that happens on Turo.”
Mathieu said Turo takes a 30% commission on car rental charges and a portion of that percentage pays for the insurance plan, which he says includes “$2 million in liability coverage and the full value of the car being protected against physical damage with no deductible for the host.”
In a statement to CBC News, a spokesperson for Economical said their partnership with Turo protects the vehicles while they are being delivered to the lessee and while the lessee is using the vehicle. Then, when the owner has the vehicle for personal use, they will again have to rely on their usual auto insurance coverage.
“A personal auto insurance policy does not normally provide coverage if the vehicle is leased,” the spokesperson said.
“This means that there would generally be no coverage under your personal auto insurance policy during the delivery and reservation periods. Coverage for the delivery and reservation periods will be provided under the policy. commercial issued to Turo by Economical.”
Economical said that if an accident occurs during the rental of the vehicle, it will provide the owner “with a letter to give to their personal auto insurance company to let them know that the claim is charged to the commercial policy instead.”
However, Economical warned that violations, such as speeding tickets, that occur while renting the car could potentially affect the owner’s personal auto insurance policy.
While this concept is new to most insurance providers in the province, Amanda Dean, Vice President Atlantic Region for the Insurance Commission of Canada, said this form of insurance for platforms car-sharing scheme had been operating in other provinces for several years. .
“There’s no reason to assume it won’t work in Newfoundland and Labrador as well,” she said.
“As in any jurisdiction, insurers will make decisions for their own businesses about what they can and cannot bear in terms of risk.”
Prior to last week’s announcement, Economical had never operated in Newfoundland and Labrador. To gain the ability to do business in the province, Economical had to be approved by the Department of Digital Government and Service, which is responsible for regulating insurance matters in Newfoundland and Labrador.
“They had to provide our Superintendent of Insurance with a copy of the policy, which we signed,” Minister Sarah Stoodley said.
Although Stoodley’s department has approved Economical to operate in the province, it urges anyone considering renting their car on the app to check with their own insurer first.
“People have their own car insurance. And anytime you do something that’s not in your policy, it’s important to check with your insurance companies,” she said.
Stoodley said any commercial use of a vehicle would first have to be approved by the people’s personal insurance company.
“Some might allow it, some might not. Some might have to give you a different type of policy. So it’s very important that if you’re interested in Turo or any other use of your vehicle outside of the normal intended type of use your car, call your insurance company and have this conversation.”
But Stoodley thinks the app should help alleviate some of the rental car shortages the province is experiencing.
“There are concerns about transportation, how everyone is going to get around this summer for the homecoming year. So we’re looking at what options we can help offer to help people get around in the province,” she said.
Brenda O’Reilly, the president of Hospitality NL, shared a similar sentiment. She said potential tourists have canceled trips to the province for fear of not being able to hire a vehicle.
“It seems like a natural fit,” O’Reilly said, referring to Turo’s ability to put more rental cars on the road.
“Is it perfect? No. It’s new days, it will be better. But the thing is, there are a lot of vehicles in this province,” she said.
“[But] it will be everywhere. So if you put your car up in Plum Point or if you put your car up for rent in Labrador, the consumer on the other side may have more access to more cars that are more readily available in rural parts of the province, which which is fantastic. »
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