What to do after a car is damaged on a Turo rental (Turo Claims Process)
If you are a new or potential host one of the biggest fears you may have is knowing what to do should a car get damaged during a rental. You have probably heard all of the horror stories of people getting screwed in the claims process as well as Turo lowballing for damages – I’m going to tell you now that as long as you follow Turo’s ToS and are patient with the process you will be fully covered for any Turo damage claim.
I have had dozens of claims paid out and haven’t had a single claim where I didn’t receive the full funds to repair the car minus the deductible.
First things first, before you even begin hosting you will need to understand the various protection packages that Turo offers to hosts. Keep in mind, these protection plans are NOT INSURANCE and should not be viewed as such. A common misconception hosts have is that the plan that a guest purchase is relevant to the host. This is wrong! If the guest has a 0$ or $3000 deductible the host will be responsible for any damages based on the host’s own protection plan they choose.
Yes, this means that if the guest damages the car, in certain scenarios the host will have to pay the entire cost out of pocket! Many hosts believe this is unfair but I want you to understand that this is very common in all types of commercial insurance. The host has a duty to mitigate damage and share the risk with the insurer – some daily rental car insurance companies will drop you like a bad habit if you even file a single claim!
Mistakes that cause claims to be DENIED!
Car must be listed on the platform before 130k miles and no more that 12 years old BEFORE the first Turo trips. If your car exceeds these after the first trip your car will be grandfathered in.
No branded titles. Make sure you run the Carfax report before you buy the car. You are solely responsible to make sure the car is eligible. Be careful, lots of people on Craigslist and Offerup may sell you branded titles as clean or sell you a car with a rolled back odometer. You can avoid this buy purchasing a Carfax report to make sure the car is eligible to be listed.
Your car must meet Turo’s listing guidelines. Check for tire tread, brake depth, dashboard lights, and registration status.
(INSERT VEHICLE CONDITION REPORT)
60% Plan
- This plan is for the most risk averse hosts. We do not recommend it as historically Turo has been very strict in regards to covering damage when there is pre-existing damage on your car. That means a bumper replacement payout can be reduced by the cost of repairing your bumper (if there’s minor scratches the cost to repair it may be deducted from your payout as Turo does not pay for betterment). The $0 deductible is only attractive for hosts that do not have any funds or budgeting skills to cover the deductible of the higher percentage plans. As a host that treats this as a business I have no use for replacement vehicle reimbursement. I have also heard of many stories that resulted in low payouts for “loss of hosting income”. Remember, you are paying for these additional protections, and they will always make money off you for selling this security.
75% Plan
- this plan is best for beginner hosts. A $250 deductible is very easy to stomach and will provide you the necessary protections to make sure your investment is protected. If you have multiple cars you will quickly find out the excess money you receive from the higher percentage plans more than covers the increase in deductible.
80% Plan – More risk, more reward.
85% Plan – Even more risk, even more reward.
90% Plan – if you are a high-volume host and you are not picking this plan you are leaving a TON of money on the table.
Commercial Plans – Commercial host is reserved for hosts that have an independent car rental operation with commercial daily rental insurance. US Choice with GMI is my recommendation for new hosts, contact David Bond for help there. Tell him Jerry from Sharing Economy Secrets sent you!
I don’t think any beginner host that doesn’t have the experience and connections of the rental car business should even consider a commercial plan. At that point you are effectively using Turo as merely a booking platform and will have to do all vehicle recovery, billing, and customer support. If you aren’t 100% sure then you shouldn’t even consider this plan.
Sharing Economy Secret’s recommendation: I am personally on the 90% plan. I have found that the rate of damage on cars is far less than the monthly incremental income I receive on the 90% compared to the 75% (or the 60% plan). Assuming revenues of $30,000 on the 90% plan you would have only received $25,000 on the 75 plan. You would have to have over 2 maximum loss on the 90% plan to lose money.
Remember, if the guest damages your car they will legally owe the money to someone. It is always in their best interest to settle the damages via direct payment or using their personal car insurance (if they have full coverage it will generally cover your car). This plan will rely on your skills at collecting money from a customer – if you are good you will atleast receive partial settlement for damages arising from guest reservations.
It is also very hard to cause $3,000 worth of damage to a car. It’s generally either significantly under or the car will be totaled. This is why I favor the 90% plan over the 80% plan, the only time that there will be damage over $1k is when the car is either a highline car or it is totaled and in 4,000+ completed trips I have only had 6 cars totaled. That is a very low risk of total.
The Car is damaged (cosmetic and mechanical)
When a car is returned and you spot damage or a guest notifies you of damage on your car you must report the incident immediately. Do not wait, do not ask them for payment, go to this link here to report the damage to Turo. You can choose to work it out with the guest should they be open to working it out and if you cannot come to agreement in 20 days you can contact Turo to take over the claim (Make sure you contact them before 20 calendars from the end date on the reservation or YOU WILL NOT BE COVERED).
Snapsheet sends an estimate for damage – please note that Turo’s provider for estimates will almost ALWAYS lowball you on the initial estimate. Don’t fret, this is to prevent unscrupulous hosts from pocketing money from damages and not fixing it. The shop you work with will help you file a supplement for the difference in repair cost and Snapsheet estimate quotes.
Filing a supplement – this is where you have to find a Turo friendly body shop. Make sure you confirm your body shop is able to work with Turo before dropping your car off. If you don’t you may be liable for storage costs if you don’t get the work done. Build a relationship with a local body shop and you’ll find out that the claims process does not have to be scary at all!
Total Losses and getting paid – total losses are when the actual cash value exceeds the salvage value + cost of repairs of the vehicle. If your car is deemed a total loss you will be sent a ACV report detailing the value of your car. A lot of new hosts actually get screwed when this happens because they are underwater on their car. That’s why it’s so important to buy your car at the right price.
Relisting the car – once repairs have been completed on your car you will need to email the Turo claims agent to relist the car with proof of repairs. An paid invoice and a photo of the repaired car will suffice.
Diminished value, loss of use, and other avenues of compensation – these are not available to you should you go through Turo’s protection plan. In the event your car is hit by another party that has insurance and that has accepted liability for the accident you will be able to capture these avenues of compensation. This is for the more advanced host – you will need to provide the at fault insurance company rental history for loss of use, a diminished value report from a third party service to get money for these.
In all, hosting a rental car on Turo is a very straightforward process as long as you understand the ToS as well as the inherent risks you face. I hope this article has been helpful and as always feel free to leave a comment and I will respond when I see it. If you’d like to schedule a one on one consultation please click here.
Jerry
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