Does insurance of your cab have an effect on you as well? Learn how cab insurance is calculated taking several factors into consideration.
Running your own taxi business is an excellent way to self-employment. You can even create jobs for some people if the fleet is having few or too many taxis on the road. Besides this, renting or leasing out your cabs is another form of taxi ownership business. Whichever way it goes, one of the most important operational responsibilities of owning a cab is to make sure of the cab insurance to be in place.
Ideally, it should cover the driver, passengers, your cab, other cars, passengers of other vehicles, pedestrians, and properties. Let's look into the different options and aspects of cab insurance that can matter for a cab owner.
Third Party Insurance is also known as “Third Party Liability Coverage” or “Act Only” coverage. This is the minimum level of insurance that can be taken. This type of insurance will protect the people who incurred loss or damage due to an accident caused by your cab. This has two components:
Bodily Injury – Insurance will cover the medical care and all associated cost with that like transporting to the hospital, complete treatment, physiotherapy, rehabilitation and so on.
Property Damage – will cover repair or replacement cost of the third party vehicle. If your car is liable for the accident, then this insurance will cover the cost for the third party.
A Liability Insurance can be designed as a Split Policy for the most effectiveness and benefit of the policyholder. The Split Policy will define the distribution of the maximum amount to be paid in case of an accident for each of the coverages below:
(a) Each person's coverage
(b) All persons coverage
(c) Property damage coverage
However, for a cab insurance, you need to go beyond Third Party Insurance. Insuring the driver and your cab is equally important. The policy and coverage of a Fully Comprehensive Coverage address these requirements.
Medical Payments – for the treatment of the driver and all the passengers present in the car at the time of the accident. The premium goes up depending on the size of your cab and the number of passengers it can accommodate.
Property Damage Insurance – This recovers the loss happened to the vehicle. This is subdivided into two categories. Car Insurance companies sell these two together as a combined package.
Collision Protection Insurance– This is applicable when your cab is involved in a collision with another car or any other stationary object, or when the car participates in a roll over event, to cover the repair or replacement costs of the cab this insurance is applied.
Comprehensive Insurance – This covers all other car damage issues except collision. The coverage is for theft, fire, disasters, vandalism, and all natural and man-made calamities.
Cab insurance should cover a business interruption policy in case the car is the only source of livelihood since it will protect for the days when the vehicle or the driver cannot operate due to accidents.
Along with these insurances, as a cab owner, you can take 'Uninsured or Under-insured Motorist' insurance. This will cover the repair charges for your cab while the damage was done by another motorist who has no or insufficient insurance.
As a cab owner you can strike a good deal on your cab insurance by:
- Building a safe driver record and no-claim history
- Making your vehicle more equipped with security measures like camera etc., so that a post-accident investigation gives clear idea to insurance company
- Extending single driver to multiple drivers policy in case you own more than one cab
- Taking Fleet insurance to cover all your cabs as compared to insuring them separately
And last but not the least, look for an insurance company or an individual insurance agent who will give you the best bargain.