Car-sharing app Turo is coming to N.L. — but how does the insurance work?

Car-sharing app Turo is coming to Newfoundland and Labrador ahead of the potential influx of tourists for Come Home Year this summer, but there are still big questions about the use of the app in the province.

The app is similar to Airbnb but for cars, allowing car owners to put up their own personal vehicle for rent. The service has been up and running in other provinces since 2016.

Provincial government officials tout the app as a solution to the car rental shortages that have plagued the province's tourism industry in recent years. But how does it work? And what about insurance?

"Every car has to go through a safety inspection to be listed on the platform," said Cedric Mathieu, Turo's vice-president and head of Canadian operations. 

"Cars need to be less than 12 years old. They need to have less than 200,000 kilometres on the odometer and be in good mechanical condition."

Mathieu said car owners can download the app, list their vehicle and set how much they want to charge. As for insurance, Turo is partnered with Economical to be the acting insurance provider while the vehicle is rented.

"Whatever happens during a Turo trip will really be covered by the Turo-provided insurance," said Mathieu. 

"And your personal insurance is not going to be affected by anything happening on Turo."

Mathieu said Turo takes a 30 per cent commission from car rental fees and part of that percentage pays for the insurance plan, which he said features $2 million in liability coverage and the full value of the car being protected for physical damage with no deductible for the host.

In a statement to CBC News, an Economical spokesperson said their partnership with Turo protects the vehicles while they're being delivered to the renter and while the renter is using the vehicle. Then, when the owner has the vehicle for personal use, the owner relies on their usual auto insurance coverage. 

"A personal auto insurance policy doesn't normally provide coverage if the vehicle is rented out," the spokesperson said. 

"This means that there wouldn't typically be coverage under your personal auto insurance policy during the delivery and reservation periods. Coverage for the delivery and reservation periods will be provided under the commercial policy issued to Turo by Economical."

The spokesperson said if an accident occurs while the vehicle is rented out, Economical will provide the owner with a letter to give to their insurance company to let them know  the claim is being charged to the commercial policy instead.

However, Economical warned that infractions, like speeding tickets, that happen while the car is rented could affect the owner's personal car insurance policy.

While the concept is new to most of the province's insurance providers, Amanda Dean, vice-president of the Atlantic region for the Insurance Board of Canada, said this form of insurance for car-sharing platforms has been working in other provinces for a number of years.

"There is no reason to suppose it will not work in Newfoundland and Labrador, as well," she said.

"As in any jurisdiction, insurers will make decisions for their own companies on what they can and cannot support in terms of risk."

To be allowed to conduct business in the province, Economical had to be approved by the Department of Digital Government and Service N.L., which is in charge of regulating insurance matters in the province. 

"They had to provide our superintendent of insurance with a copy of the policy, which we signed off on," said minister Sarah Stoodley.

Stoodley said anyone who is thinking of putting their car up for rent on the app should still first check with their own insurance provider.

"People have their own auto insurance. And any time you do anything that might not be in your policy, it's important to check with your insurance companies," she said.

Stoodley said any commercial use of a vehicle should first be approved by people's personal insurance company.

"Some might allow it, some might not. Some might have to give you a different kind of policy. So it's really important that if you're interested in Turo, or any other use of your vehicle outside of the normal kind of intended use of your car, to call your insurance company and have that conversation."

Stoodley says the app should help relieve some of the rental car shortages the province has been experiencing. 

"There's concerns around transportation, how everyone's going to get around this summer for Come Home Year. So, we are looking at what options we can help provide to help people get around the province," she said.

Brenda O'Reilly, the chair of Hospitality N.L., said potential tourists have cancelled trips to the province because of a lack of rental vehicles, so Turo seems like a "natural fit."

"Is it perfect? No. It's new days, it will get better. But the thing is … there are a lot of vehicles in this province," she said.

"So if you put your car up in Plum Point or if you put your car up in Labrador for rent, the consumer on the other side can get more access to more cars more readily available in rural parts of the province, which is fantastic."

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