A Tuesday with no trip
A Tuesday. No guest, no trip. Sam backs the Soul out of a parking garage and clips a concrete pillar. Who covers that?
Most new hosts get this wrong. A rental car needs three layers of protection, and the third one is the gap almost nobody plans for.
Layer 1: the business
Form an LLC, so the business is separate from you. Get an EIN, the business’s tax ID. Open a business bank account and run every dollar through it. Add a separate phone number and email.
There’s a bonus: parts stores and repair shops open commercial accounts for businesses. Rules vary by state, so have an attorney and a CPA check your setup.
Layer 2: Turo’s protection plan
During a trip, your plan reimburses eligible damage above your damage responsibility. It also carries up to $750,000 in third-party liability.
But that cover lives inside the trip. When the trip ends, it’s gone. And Turo says it plainly: Turo is not an insurance company.
The gap: who covers the car between trips?
Back to the garage. There’s no trip, so it isn’t Turo. And a personal auto policy can refuse the claim, or cancel the policy, once the insurer learns the car is rented out.
That’s the gap. Sam needs layer three.
Layer 3: your own commercial policy
You need your own commercial policy for between trips, one that knows the car is used for rentals. Hosts report around a hundred dollars a month per car. It’s the same insurance line from the budget in lesson 1.1.
Before you buy, read the exclusions. The cheapest policy isn’t the safest one.
Keep it clean from day one
Three layers: the business, Turo’s plan, and your own policy. And from day one, keep every receipt in the business account, tracked per car. You’ll need those numbers in the next lesson.