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Custom insurance For TAxicab Owners & Operators
Owning your own taxicab business is an excellent way to make sure you’re financially secure, independent and successful. As the owner of a taxi, you choose how often you work, how far you drive, and how many fares you want to secure each day.
Some taxicab business owners actually own many taxis and hire drivers to operate them each day. Others lease or rent the cabs to independent operators. Small taxi companies and independent operators may rent or lease their taxicab while others are buying or already own the vehicle outright.
Regardless of how you operate your taxi business, there are a number of important details you must keep track of in your day-to-day operations. One of the most important details you must be sure to not overlook, is taxicab insurance. By carrying insurance for your taxi, you can rest assured that all of the hard work and investment you have put into the business will not go up in a moment of unexpected disaster. Here are the primary types of taxi insurance you’ll need:
Liability Insurance – This is taxicab insurance that is required by law in all states. This insurance is designed to protect other people from suffering severe losses if you cause an accident with your cab. Liability insurance is broken into two primary areas: One pays for injuries that happen directly to people and the other pays for repairs to the people’s property.
- Bodily Injury - Bodily injury is the portion of your liability insurance that pays for physical harm and injuries caused to a person when there is an auto accident. If your taxi is at fault for an accident and one or more people are injured, those people will require medical care. Depending upon the severity of the injuries, they may need immediate emergency care along with ongoing recovery.
The bodily injury portion of your taxi’s liability insurance will pay for those costs that came about due to the accident. It will pay for emergency medical transport to the hospital, treatment and care at the hospital, prescription medications, time spent in the hospital, the cost of physical therapy or other rehabilitation measures, and anything else deemed necessary so that the injured party is able to recover from the accident completely. Bodily injury will even pay the injured parties for pain and suffering and lost wages due to time off work. It will even pay for the funeral expenses if someone is fatally injured in the accident.
Bodily injury insurance is commonly set up with two defined policy maximums: Per person and per accident. In a split level policy, you choose the maximum benefit amounts for your coverage. The first number is the maximum amount your policy will pay for one single individual’s bodily injuries in an accident. The second number is the maximum amount your policy pays in total for all person’s bodily injuries in the accident. The third number is for property damages, which we’ll look at next…
- Property Damage – The property damages portion of your liability insurance is designed to pay for the repairs or replacement of property that you damaged when you caused the auto accident. If, for example, you accidentally hit another car while pulling your taxi over to pick up a fare, your property damages insurance will pay for that car to be repaired. If you cause another vehicle extensive damages in an accident and it must be replaced, property damages coverage will pay for that as well.
Property damages is the third number in a split limit liability policy. This number defines the maximum amount of benefits your taxicab insurance will pay for property damages on a per accident basis.
For example, a split limit policy of $100,000/$300,000/$50,000 means that for each accident, your liability policy will pay no more than $100,000 for a single person’s bodily injuries caused in the accident. It will also pay no more than $300,000 for the total combined bodily injuries of all victims involved. And it will pay no more than $50,000 for property damages.
When you set up your taxicab insurance liability you will choose the maximum benefits you’d like. In some areas you may be able to get a combined single limit policy, which simply defines the maximum total amount of coverage you have available for each accident. Combined single limit policies do not designate a maximum limit for bodily injuries or property damages, just a maximum limit per accident.
You’ll also need to choose an insurance deductible when you set up your liability policy. The deductible amount is what you are personally responsible for out of your own pocket for each accident your taxicab is liable for. If for example, you select a $500 deductible, then you would personally pay for the first $500 in injury or damage expenses. Your insurance policy would pay for amounts above and beyond that deductible.
Medical Payments – Medical payments insurance is extremely important for a taxicab business owner, since there is almost always one or more passengers on board while the cab is in operation. Medical payments insurance pays for the medical expenses that arise when your taxi is involved in an auto accident. Regardless of who is at fault for the accident, this coverage applies to the taxi driver and any passengers who are in the vehicle with him at the time of the accident. Medical payments coverage is not available in all areas however. Call and speak to one of our licensed representatives and we’ll help determine if it’s available and appropriate for your taxi’s insurance needs.
Physical Damage Insurance – Physical damages insurance is designed specifically for protecting your taxicab. This coverage is very important if you lease or rent your cab, or if you still have a lien on it from your original auto finance loan, because it provides you with the highest level of loss protection. Depending upon the type of physical damages insurance you select, your taxi will be covered for theft, vandalism, collision, roll-overs and more.
- Comprehensive Physical Damage Protection – This insurance provides you with a comprehensive level of loss protection for your taxi. It protects you from a wide variety of hazards, perils and unexpected events that are not related to collision damages or damages caused by overturning. If for example, your taxicab is damaged by a tree falling over in a storm, comprehensive damages insurance will pay for the cost of repairing your cab. If the vehicle is stolen, broken in to, or damaged due to vandalism, this coverage will also pay for the repairs or replacement so that you don’t have to.
- Collision Protection – Collision protection is designed specifically to pay for expenses that arise when your taxi runs into something or overturns. If, for example, the cab rolls over after skidding out of control on an icy road, collision damage protection will pay to repair or replace the vehicle. If you run into a fire hydrant or mailbox while taking a tight turn, this coverage will pay for those repairs too.
- Specified Peril (CAC) – Specified Peril insurance is also known as Fire and Theft with Combined Additional Coverage, or CAC. This coverage provides your taxicab with insurance against specific types of events that are not collision or roll-over related. It only protects your cab from those perils that are specified as being covered on your insurance policy.
Uninsured or Underinsured Motorist - Despite laws in almost every state, there are still some people who do not carry basic liability insurance on their vehicle. A person who drives without insurance is known as an uninsured motorist. If this person causes an accident with your taxicab, there is no insurance coverage available to pay for the cost of repairing your cab or paying for the bodily injuries you sustain. Similarly, some people carry a small amount of insurance but it is not enough to cover all of the injuries and damages they cause in an accident. You can protect yourself from having to pay for these expenses yourself by carrying uninsured or underinsured motorist coverage on your taxicab. This insurance works much like your basic liability policy does, but the benefits go towards your injury and property damage bills instead of to the other driver.
- Bodily Injury - As covered with Liability Insurance.
- Property Damage - As covered with Liability Insurance.
- Collision Deductible Waiver (CDW) - If you are involved in an auto accident that the other driver is at fault for, you will not want to pay your insurance deductible to get your taxicab repaired. If you carry uninsured or underinsured motorist bodily injury insurance on your taxi however, you can qualify for a collision deductible waiver (CDW) so that you don’t have to pay the deductible.
Other Important Commercial Auto Insurance for TaxiCab includes:
- Rental – Rental insurance pays for the cost of renting a temporary replacement cab when yours is out of commission due to an accident.
- Towing – If your taxi is damaged extensively in an auto accident, towing insurance will cover the cost of having it towed away from the scene.
- Accessories (Ex: mileage meters, navigation units, radios) - Your taxicab has expensive equipment installed in it that needs to be insured as well. Your mileage meters for example, GPS navigation units and communications radios can all be protected by adding accessories coverage to your business auto insurance policy.