Taxi Insurance

Taxi Insurance once came in one flavor, taxi.Today there are hybrid companies that offer similar services to taxi services that are rideshare services. Some are nationwide like Uber, Lyft, and Sidecar.

When these companies started business there were no regulations for their financial ability, many carried regular passenger insurance – which does not cover you or your car when driving for hire.

To continue in business, some of the companies were able to get insurance that covered the car and driver when driving with a passenger. However, California has stricter regulations that require drivers be covered the moment they turn their smart phones on and activate the app that links to the rideshare program.

What Rideshare Is

When you were in college in Michigan and needed a ride home to Chicago for the holidays, you would go to the Student Union and post a notice that you were looking for a ride to Chicago and would split gas and tolls. At the same time you looked for a notice from anyone looking to share their car with someone for sharing expenses.

This is how ridesharing began. With connective technology so advanced it wasn’t long before someone came up with the idea for an app that allowed users to connect with other users willing to drive them someplace – the main difference between ridesharing at college and ridesharing today is the distance. Today it is much shorter, usually an inter-city ride or a ride to the airport.

California Requirements for Rideshare Insurance

Following are the requirements for California RideShare companies and their drivers on insurance:

• When the car and driver are not driving for their app company, their personal auto insurance covers them.

• The moment they switch on the app, the rideshare company’s insurance kicks in, even though there is not a passenger in the car.

• Minimum rideshare coverage requires $50,000 in liability for the injury or death of single passenger, an extra $100,000 for all claims for a single accident. And when the driver’s personal property is not adequate. The moment the driver is matched to a passenger the law requires the rideshare company give $1 million in coverage for the length of the ride.

The California Public Utilities Commission regulates these companies, they created a new class covering the industry called “transportation network companies.”

Taxicab Company Insurance

Taxicab owner/operators is an excellent way to make a nice living while being your own boss. Without a taxi, you are out of business.

One of the most important details in owning a cab company is having the right insurance. Although each state may have different limits on mandatory requirements, and may not even include an item or have included more items, following are the insurances you need most.

The Taxi Industry regulation in many states cedes regulation to localities. California is such a state even though the California Public Utilities Commission oversees the industry from the state level.

WORKER’S COMPENSATION INSURANCE

If you have employees, even one, and run your company in California or any other state in the country you must have worker’s compensation. If your employee has a job related injury, worker’s comp pays medical expenses, lost wages, and short-term disability including rehabilitation. Calculation for premiums are risk based, and include, region, age of vehicles, drivers’ driving record and more.

PROPERTY DAMAGE

There are two kinds of liability insurance, personal injury is one, property damage is the other. However, California and most other states insist that the vehicles first buy auto insurance and then their taxi insurance. Your auto insurance covers claims stemming from a specific accident, your taxi insurance provides what private car owners equate with collision and comprehensive Coverage from taxi insurance protects your company against:

• Vandalism

• Theft

• Fire and damage caused by accidents where the company’s driver is at fault.

• A popular endorsement in to add business interruption coverage that pays the company when it is not able to run its cabs.

Personal Injury or death claims go to the standard automobile coverage.

Typically, Taxi Insurance Companies Buy

• Auto Liability $1,000,000

• PIP Statutory per state

• UM/UIM Minimum Limits

• Auto Liability. Self Insured Retention (SIR): Generally $25,000 to $250,000

ABOUT SIR

There are two ways that insurance companies cut their risk exposure on liability policies. these are deductibles and Self Insured Retention. Rather than have a standard deductible, a SIR comes into play when an accident happens and there is injury or property damage.

In the event that there is a claim against you for $100,000 and you have a $25,000 SIR, the insurance company expects you to pay the first $25,000. If you have $250,000 SIR you will pay the full amount of the claim. SIRs are not just for large companies, but choosing SIR coverage or a deductible is not the way to decide which is best for you. Talk with your insurance advisor before you make a choice.

Taxi insurance is very complicated, your insurance agent will explain how the process works, requirements to get coverage, and other coverage’s you may need such as an umbrella policy.

Overall, the industry is under the authority of the California Public Utilities Commission and in most other states a similar organization. But they share the authority with each locality so within California there is often confusion about insurance requirements and other issues such as driver’s age, criminal background checks and more.

CONTACT PRECISION

Give Precision a call to find out more information about obtaining a taxi insurance policy. We focus on providing the best options at the most competitive rates.