How Does Zipcar Insurance Work?

Zipcar insurance, and other car-sharing insurance, is often the bare minimum as required by state laws. Zipcar insurance options are minimal, and Zipcar caps their coverage at $300,000, meaning drivers could be caught paying for damages out of pocket. If you're car sharing, we recommend non-owner auto insurance as well as Zipcar insurance to guarantee you're protected as much as possible. Enter your ZIP code below to start comparing non-owner personal auto insurance quotes now.

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Rachel Bodine graduated from college with a BA in English. She has since worked as a Feature Writer in the insurance industry and gained a deep knowledge of state and countrywide insurance laws and rates. Her research and writing focus on helping readers understand their insurance coverage and how to find savings. Her expert advice on insurance has been featured on sites like PhotoEnforced, All...

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insurance...

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Reviewed by Leslie Kasperowicz
Farmers CSR for 4 Years

UPDATED: Jun 22, 2021

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Zipcar insurance, and even other car-sharing insurance, is often the bare minimum as required by state laws. Zipcar insurance options are minimal, and Zipcar caps their coverage at $300,000, meaning a zipcar driver could be caught paying for damages out of pocket.

If you’re car sharing, we recommend non-owner auto insurance as well as Zipcar insurance to guarantee you’re protected as much as possible. Enter your ZIP code below to start comparing non-owner personal auto insurance quotes now.

Many people, especially in major cities, have been ditching their cars in recent years in favor of car-sharing services such as Zipcar and Enterprise CarShare. Services like Zipcar, which used to be thought of as hourly rental cars, are now so convenient and widespread and have such a wide variety of vehicles, including premium vehicles, that they have allowed many people to forgo car ownership completely.

In big, dense cities like New York, Washington, Chicago, Boston, and San Francisco, car-sharing companies have pickup/drop-off locations practically on every block. In the world we live in, which values convenience above all, it’s no wonder that car sharing is gaining such momentum!

While car-sharing has been getting more and more accessible to your average American, the insurance issues that come along with it are still a source of confusion. Are you covered by liability insurance if you get into an accident? Will the car-sharing company cover your medical bills if you get injured in an accident?

If your car gets damaged or stolen while you are driving it, who pays for it? These are just some of the frequently asked questions when it comes to car sharing and insurance to cover the damage. Below, we hope we can clear some of the air for you.

How can I compare traditional rental cars vs. car sharing insurance?

A traditional car rental company will usually charge rental rates anywhere from $10 to $30 per day (or more) for car insurance coverage. Oftentimes, a credit card like Visa can provide free coverage, and more often than not, the driver opts out of rental car insurance completely.

After all, with rental insurance rates sky high, a multi-day rental could put a dent in one’s bank account even if you don’t drive many miles. A car sharing company, like Zipcar, usually offers insurance to members, which covers the duration of the rental. But sometimes, this coverage is far from enough.

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What are the issues with car-sharing insurance?

According to the NYTimes, Zipcar’s insurance caps its coverage at $300,000 per accident. This, as they explain, is oftentimes far from enough coverage, especially in a car accident with multiple injuries and/or fatalities. If you drive a Zipcar, you better buy personal lines insurance coverage or be extra careful not to get into a serious accident. If not, you could face a damage fee in the millions!

Hertz 24/7, which is Hertz’s answer to Zipcar, has an even weaker insurance system, according to the Times. They only offer the state’s bare minimum insurance on each rental, which they explain, is far from enough.

What’s worse is that drivers under 21 get even less coverage from these car-sharing companies. These drivers, which are statistically more reckless than their older counterparts, need insurance more than anyone. Still, if they get into an accident while driving one of these vehicles, they could be hurting (financially) the most and ruining your clean driving record.

What does car sharing insurance cover?

When you rent a car from a car-sharing service, you will always be covered with the minimum level of car insurance in your state. Having the bare minimum coverage is always the auto insurance policy of the major car-sharing companies. If you pay for the car with a major credit card like Visa, Mastercard, or American Express, you will automatically get collision coverage and some level of comprehensive coverage (Check with your credit card company to be sure). You may have to add additional miles if you have a mileage cap. Apart from that, here is the basic coverage provided by the major car-sharing providers:

Company Liability PIP/Uninsured Motorist Collision/Comprehensive Deductible Other Relevant Information
Zipcar 100/300/25 Yes/yes $1,000 Damage Fee For drivers under 21, liability insurance is limited to the state-regulated limits.
Hertz 24/7 State Minimum Yes/yes $750
Enterprise CarShare State Minimum Yes/yes $500 Liability insurance can be increased to a $300,000 limit if you pay an hourly fee of $1.40.
car2Go 100/300/50 Yes/yes $250

Should I consider a non-owner car insurance policy?

You might be asking “can I insure a car not in my name If you do not own your own vehicle, but often times rent from car-sharing services or even borrow your friends’ vehicles, you could benefit from buying a non-owner auto insurance policy. 

These policies provide liability coverage to people who don’t have their own cars. With these policies, because you are purchasing your own coverage instead of relying on other people’s policies, you have more freedom to make sure you always have enough coverage. As explained above, car-sharing services oftentimes do not have adequate liability coverage. If you want to make sure you always have enough, a non-owner insurance plan might be the smart way to go.

Whether you need liability-only or full coverage auto insurance, we can help. Enter your ZIP code and get started now.

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