Insurers, MGAs and brokers could be in for a windfall when p2p car rental operator Turo lands in the UK.
The US company, billed as Airbnb for cars, last week announced plans to launch in Canada – and now Insurance Business UK can reveal the UK is firmly on Turo’s radar. Company spokesman Steve Webb told us: “We are planning to launch in the UK but don't have any specifics to share just yet.”
Insurance arrangements are seen as the biggest stumbling block for new sharing-economy players but Turo has an agreement in place with Canadian insurer Intact Financial Corp ensuring every rental is backed by CAD2m in auto liability insurance. That deal allowed it to launch in Ontario, Quebec and Alberta. The company will launch across Canada once insurance issues have been resolved in other provinces. Turo will certainly need to have a similar arrangement in place when it arrives in the UK.
Even though the company itself provides the commercial insurance that covers the vehicle while it’s hired out, Turo advises everyone planning to rent out their cars to hirers to contact their brokers before doing so, suggesting brokers need to be across any extra tangential risks that might require adjustments to the renter’s own car policy.
Turo’s model allows car owners to rent out their vehicles to strangers, generating cash for the owner from an under-utilised vehicle. According to the company, the average active vehicle owner in the USA makes around $600 per month. For renters, the rates offered are substantially lower than the equivalent from conventional car-rental outlets. Both owners and renters must pass a screening process – cars must be less than 10 years old with fewer than 125,000 miles on the clock in Canada.
Turo already operates in 2,500 cities and 300 airports, and claims more than a million rental days to its credit so far. “We like to think of our mission as one aimed at putting the world’s one billion cars to better use,” chief executive officer Andre Haddad said. “There are a lot of cars that may at one point in their life cycle be underutilised. That’s a lot of economic waste.”
Turo’s US website has details of cover offered to owners, including a USD1m liability insurance policy offering protection against ‘lawsuits for injuries and property damage that occur during the rental period’.
