How Does Zipcar Insurance Work?

Last Updated on March 26, 2022

Zipcar is a ride-sharing service popular among city drivers who only need to drive occasionally. But how does insurance work when driving a Zipcar? Are you automatically covered – or do you need extra insurance?

Zipcar extends liability coverage to all members. This liability coverage provides basic protection if you damage someone else’s property (via property damage liability coverage) or injure someone with your vehicle (via bodily injury liability coverage).

However, Zipcar’s built-in car insurance may not provide sufficient coverage. Furthermore, coverage varies based on how long you’ve been a Zipcar member, your age, and other factors.

Today, we’re explaining everything you need to know about Zipcar insurance and how it works.

How Zipcar Car Insurance Works

Zipcar Insurance explainedAll Zipcar members have some amount of liability coverage whenever they drive a Zipcar vehicle. However, most members receive only a minimum amount of insurance coverage. Plus, this insurance functions like secondary coverage: it only applies if you exceed the limits of your ordinary auto insurance policy.

Just like a minimum liability plan, Zipcar’s built-in car insurance may cover minor damage and innocuous situations. It’s unlikely to cover significant accidents.

If you cause a minor fender bender, for example, then Zipcar’s car insurance should cover the incident without issue. If you collide with a minivan carrying a family of four that requires $300,000 of medical bills, on the other hand, you may run into issues.

If you exceed the limits of your Zipcar policy, and if you are not covered by your ordinary policy, then you are required to pay all remaining fees out of pocket. Zipcar covers you up to the limits of the company’s policy, but you’re still liable for any damage exceeding this limit.

In other words, Zipcar insurance primarily works to cover other people from damages you cause while driving a Zipcar – including bodily injury expenses and property damage costs.

The Zipcar $1,000 Damage Fee and Property Damage Coverage

Some Zipcar drivers are required to pay a $1,000 damage fee. If you damage the Zipcar while driving, then you may need to pay a $1,000 damage fee – similar to the deductible you would pay if damaging your own vehicle.

Zipcar may charge this fee even for seemingly minor damages – like dents, scratches, windshield cracks, or hail damage.

Zipcar Provides Different Insurance to Different Members

Zipcar has liability coverage on all vehicles, although it applies this policy differently based on your membership level.

A new member, for example, will have less car insurance coverage than someone who has been a member for multiple years.

New members start with liability coverage at the state’s minimum required level of liability coverage. As a new member, you get the lowest legal level of car insurance possible based on your state’s laws.

Zipcar members under 21 receive the same amount of liability coverage. As a Zipcar member under 21, you receive basic liability coverage (regardless of how long you have been a member).

As a Zipcar member over 21 with a clean driving record, you can pay for a damage fee waiver (DFW). If you buy this waiver, then you do not need to pay a fee for any Zipcar accident. This DFW is optional, and members can decline it. If you add the DFW to your account, then you will not need to pay the $1,000 damage fee after a Zipcar accident.

Zipcar does not provide uninsured or underinsured motorist coverage, nor does it provide any optional auto insurance coverage whatsoever. In most cases, Zipcar only provides the bare minimum car insurance coverage legally required in your state.

Similarly, Zipcar provides personal injury protection (PIP) coverage only in states where PIP is legally required. PIP covers medical bills and similar costs regardless of fault. Most states do not require PIP, so most Zipcar members are not covered by PIP.

Zipcar updates its car insurance policy regularly. A few years ago, Zipcar increased coverage to members who had been with the company for a few years. Today, all Zipcar members with a clean record above age 21 have similar car insurance policy options.

You can view Zipcar’s member contract here, which includes all insurance terms and how they work:

Zipcar Insurance Plans

Zipcar offers three insurance plans. By default, every Zipcar member qualifies for the Standard Protection plan.

If you are above age 18 and have no Zipcar accidents within the past 12 months, then you can qualify for the Plus Protection or Premium Protection for added peace of mind.

Here’s how the plans break down:

Protection PlanPlan Description
Standard ProtectionIncluded with all Zipcar memberships. You may pay a $1,000 fee per incident.
Plus ProtectionAvailable for $5 per month or $50 per year. You may pay a $375 fee per incident.
Premium ProtectionAvailable for $9 per month or $79 per year. You pay $0 per incident and no damage fees. 

You can add Zipcar damage protection via the Zipcar mobile app or website. Or, view plans and how they work here.

Do I Need My Own Car Insurance When Driving a Zipcar?

You do not need your own car insurance to drive a Zipcar. However, if you have your own auto insurance policy, then this policy acts as your primary coverage when driving a Zipcar.

Your insurance policy treats a Zipcar just like a rental car: it extends coverage to you for the duration of the car rental. If you have collision or comprehensive coverage, then your insurer should pay for any damage to the Zipcar you cause while driving it. And, because you have liability insurance (as legally required), this insurance extends to your Zipcar.

How Zipcar Works If You Don’t Have Car Insurance

Many Zipcar drivers do not have car insurance – and that’s okay!

Zipcar is popular among city drivers who don’t need to own a vehicle, so many members don’t have car insurance (or a car). If you drive a Zipcar without car insurance, then you’re still covered by Zipcar’s policy.

Your credit card could also cover Zipcar rides. If you pay for your Zipcar using your credit card, then your credit card could extend coverage to the Zipcar. Some credit cards explicitly exclude non-conventional “rental” car companies like Zipcar, while others cover them. Check your policy. Visa, for example, recently updated its rental car coverage policy to exclude Zipcar and similar services.

Other Zipcar drivers buy non-owner car insurance for added protection. If you are worried about Zipcar’s low liability insurance limits, then non-owner car insurance may be the right choice. With non-owner car insurance, you get car insurance even without owning a vehicle. You can significantly add coverage and give yourself better peace of mind when driving a Zipcar.

Final Word on Zipcar Insurance

Zipcar, a subsidiary of Avis, has more than 1 million members around the world. The popular car-sharing service extends car insurance to members in different ways.

By default, all Zipcar members have minimum liability coverage when driving a Zipcar (even if you don’t have insurance). However, this coverage can leave you under-protected. You may want to buy a non-owner car insurance policy, use your existing auto insurance policy, or check your credit card policy to increase coverage.

Alternatively, Zipcar offers two premium insurance options (Plus Protection and Premium Protection) that extend coverage.

Consider your risk, current insurance policy, and membership status to determine which Zipcar car insurance is right for you.

James Shaffer
James Shaffer James Shaffer is a writer for and a well-seasoned auto insurance industry veteran. He has a deep knowledge of insurance rules and regulations and is passionate about helping drivers save money on auto insurance. He is responsible for researching and writing about anything auto insurance-related. He holds a bachelor's degree from Bentley University and his work has been quoted by NBC News, CNN, and The Washington Post.
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