Turo is evolving its business model. Can his insurance offers keep up?

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Turo, the decentralized concert-style car rental platform, has garnered a lot of attention from investors and car owners since the start of the summer. Many have called Turo the “Airbnb of Cars,” the platform with 450,000 listings in the United States and Canada, allowing renters to reserve vehicles directly from their owners.

“Unlike traditional car rental companies, Turo does not own a fleet of vehicles,” says Laura Adams, insurance and finance expert at Clearsurance.com. “The service they provide is an online platform where private car owners rent their cars. This means that Turo’s overhead costs are relatively low compared to the competition.

One of the biggest questions about the future of Turo is insurance for both renter and renter. “Turo takes a percentage of rental income, such as a range of 10-40% depending on the insurance coverage a car user chooses, such as premium, basic, or minimum coverage,” Adams explains. “So the assurance that a customer chooses is an important factor in Turo’s revenue model. “

More thoughts from Laura Adams

Turo is an innovative peer-to-peer carsharing marketplace with a revenue model linked to its insurance offering. It has an impressive user base in the United States, Canada and the United Kingdom, with over 14 million users in 5,500 cities.

Turo allows passenger car owners to rent their vehicles through a website and mobile app. Then, guests can choose from a selection of over 850 makes and models and book time slots.

Users can hire a vehicle to get from point A to point B or test drive a particular vehicle model they wish to purchase at affordable rates. Then the car owners or hosts earn an income that offsets the cost of owning a car.

Insurance is mandatory for everyone who uses the Turo platform, including hosts and guests who rent cars. And Turo takes a percentage of rental income based on the insurance coverage the user chooses. Thus, insurance supply is an important factor in Turo’s revenue model. In the US, Turo offers guests up to $ 750,000 in liability insurance with Liberty Mutual.

The level of protection hosts get in the event of physical damage or theft to their vehicles varies depending on the income plan they choose. There are five plans offering reimbursement for auto repairs, up to the cash value of the vehicle.

Turo offers guests the option of opting out of their insurance program altogether and purchasing their own commercial auto insurance policy. With this option, Turo only keeps 7.5% of the amount paid by customers.

If Turo continues to expand into new cities, its insurance offering may not be sustainable as it evolves. For example, if smaller car rental companies rather than individuals own more cars on the platform, Turo’s revenue could decline.


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