Getting on the road is often presented as an either/or choice. You can either use public transit and be better for the planet, but have a reduced amount of independence and convenience, or you can own your own personal vehicle and shoulder all of the associated costs, but travel when and where you want.

However recently, third option has emerged – and we’re not talking about hailing a taxi (or a rideshare company).

What is car sharing?

Car share companies are services that, like traditional car rental services, allow a licensed driver to gain access to a car for a temporary period of time.

However, unlike your average airport rental, the cars are actually shared: Companies follow a membership model, and each member (i.e., driver) pays a monthly fee which covers the overhead and profitability of the company. In exchange, they get access to vehicles which are spread across accessible parking spots in the cities where they operate and offer rental periods as little as a few hours at a time (as opposed to a full day).

Rather than handing over their license and registration to a rental office and filling out a agreement contract each time, drivers are pre-vetted when they apply to join each service and are given special key fobs or a mobile app that they can use to unlock their rented car and go at their whim.

However, as with any motor vehicle, both the driver and the car they’re in need to be insured. And how they’re insured can get complicated.

Read more: How to save money on your next road trip

How does insurance work when car sharing

Members must be at least 21 years old and fully licensed to join, though some companies allow members as young as 19, with stricter guidelines (they must have a clean record and no violations related to impaired driving or major convictions, among other criteria).

Once you’re accepted, you’re covered. Car share services typically focus on three types of insurance coverages. They include:

• Physical damage to the vehicle
• Interior damage to the mechanical aspects of the unit, and
• Third-party liability insurance carried by you or the car share company.

You may also be covered by your own primary auto insurance, any collision loss coverage provided by your credit card, and then whatever options you select from the car provider themselves.

If you have both personal auto insurance and company-provided insurance, your personal insurance will likely be used first before their policies kick in.

Here’s what different popular car share companies offer. 

Communauto

Montreal-based Communauto operates across cities in Alberta, Nova Scotia, Ontario, and Quebec. They also operate in Paris, France.

Communauto has multiple tiers of memberships, which offer more value the more you use the service. It also offers a free basic membership (though drivers will still have to pay more per trip).

When it comes to insurance, customers select a damage protection plan when they choose their plan. In Canada, that cost is $8.50 per month for a $0 deductible, $6.50 per month for a $300 deductible, and a $1.10 per trip for a $600 deductible.
Their insurance plans vary from city to city. Beniva provides $5 million in liability coverage for vehicles in Quebec, Unica covers $2 million in other provinces.

Turo

Turo operates across most of Canada and their insurance policy is underwritten by ICBC in British Columbia and Economical Insurance Company in the other provinces. Two million dollars of third-party liability insurance is standard, even if you decline a coverage plan.

Under the standard plan, your coverage covers $2,000 of physical damage, but will increase if a claim is made. If you opt for a higher premium, you’ll gain fuller physical damage coverage. However, regardless of the plan you choose, the insurance does not cover mechanical or interior damage.

Turo is also one of the few companies that allow you to be a host. Host’s cars are insured by a commercial auto insurance plan before being rented out by customers on the platform. When a driver opts to host their car out, the primary insurance is drawn from the commercial auto insurance offered through Turo; it should have no affect on their own insurance rate (though they’ll need to update their insurance provider of this change).

Related: What are the consequences of lying on your auto insurance application?

Enterprise

Enterprise entered the car share game in 2005, but their network has predominantly stayed south of the border. The company only offers services within the Greater Toronto Area.

Enterprise CarShare has three member plans and charge an additional hourly or day rate. In terms of insurance, Enterprise defaults to any collision loss damage insurance provided by your credit card issuer, before offering four coverages with different deductible levels.

To secure a $0 deductible, you can pay an annual fee of $105, a monthly fee of $14, or a per-trip fee of $1.75 per hour. If you don’t choose any of these plans, you are responsible for the first $1,250.

Enterprise carries $1 million in third party liability insurance on all their vehicles.

Zipcar

Zipcar operates on a monthly membership model. From there, you’ll pay an hourly or a day rate once you’ve reached a specified prepaid amount of mileage. All memberships include secondary insurance.

Zipcar customers must pay a deductible of up to $1,000 for damage to sustained to the vehicle. However, like many of its competitors, the company offers additional plans that can reduce the fee per incident to $0.   

If you’re looking to participate in a car share model, you are spoiled for choice (depending on your province). Just make sure that your insurance coverage is as airtight as your travel plans are.