I manage a fleet of 15 cars for other owners. I take a 30% cut. One day, I was driving an owner’s BMW to the car wash and I rear-ended a minivan. The owner’s insurance denied the claim because I was “driving for business.” Turo denied it because the car wasn’t on a trip. I was personally liable for $15,000. I realized my “side hustle” had a massive legal hole.
Key Takeaways
- You are a “Bailee”: Legally, when you take custody of someone else’s car for money, you are a “Bailee.” You are liable for damages while it’s in your care.
- General Liability is Not Enough: Standard business liability covers slip-and-fall in your office. It does not cover damage to vehicles you drive.
- You Need “Garage Keepers” Insurance: This is the specific policy for valets, mechanics, and Turo Co-Hosts. It covers customer cars while in your possession.
- The Contract is Key: You need a written contract with the car owner stating who insures the car during “Period X” (storage/delivery).
The “Why”: The Care, Custody, and Control Exclusion
Almost every liability policy excludes property in your “Care, Custody, and Control.”
If you crash the owner’s car, your insurance won’t pay (business use), and their insurance won’t pay (unlisted driver/business use). You are in the void.
The Investigation: Getting Coverage
I tried to buy insurance for a Co-Hosting LLC.
- Standard Agent: “We don’t insure Turo managers.”
- Specialty Broker: “You need a ‘Non-Owned Auto’ policy and ‘Direct Primary Garage Keepers’.”
- Cost: About $2,500/year for a small fleet.
- Value: It covers you when you are driving the cars to the wash, to the mechanic, or delivering to guests.
Comparison: Liability Layers for Co-Hosts
| Situation | Who Pays? |
| Guest Driving | Turo Protection Plan |
| Owner Driving | Owner’s Personal Insurance |
| You (Manager) Driving | YOUR Garage Keepers Policy (or you personally if uninsured) |
| Car Stolen from Your Driveway | Garage Keepers (if you have it) or Owner’s Comprehensive |
[IMAGE: Diagram showing the “Chain of Custody” of the vehicle and which insurance applies at each stage]
Step-by-Step Action Plan
- Form an LLC: Never co-host as an individual. If you crash, they take your house.
- Sign a Management Agreement: Have a lawyer draft a contract where the owner agrees to maintain comprehensive coverage on the vehicle at all times.
- Buy Garage Keepers Insurance: Search for “Dealers Open Lot” or “Garage Keepers” coverage. Quote it with GMI or a commercial broker.
- Limit Your Driving: Use a mobile car wash service so you don’t have to drive the cars. The less you drive, the less risk you have.
FAQ
Can I just be added to the owner’s policy?
Maybe, but most personal insurers won’t add a “Fleet Manager” to a personal policy. It raises red flags.
What if the owner doesn’t have insurance?
Run. Do not manage a car that isn’t insured by the owner. If Turo denies a claim, you are the next target.
Does Turo offer insurance for Co-Hosts?
No. Turo’s insurance contract is with the “Host” account holder. If you are logging into the owner’s account to manage it, coverage applies to the owner, but your liability as a driver is still exposed.