If you've recently signed on with one of the national companies that helps you work as a driver-for-hire, you may be excited at the prospect of earning money by making small trips around town. Indeed, many who work for these companies have found them an easy and convenient way to earn some extra money or even cover a vehicle payment. However, embarking on this adventure without proper insurance can be a risky prospect. Read on to learn more about your insurance options (and obligations) after you've transitioned your vehicle from a passenger vehicle to a part-time taxi cab.
Do you need to change your insurance coverage before working as a driver for hire?
Most non-commercial auto insurance policies provide coverage only for personal use – once you begin using your vehicle to make money, rather than just transport you and your family members around, your coverage for these money-making activities may cease. This means it's crucial to find some insurance that covers your vehicle (and its occupants) during the times it's in service; being involved in even a not-at-fault accident could cost you significantly if you're unable to obtain compensation for lost wages, injuries, and property damage.
In some cases, the parent taxi company itself may offer some supplemental insurance coverage, often at a lower cost than you'd be able to obtain on your own through a non-pooled policy. You may want to investigate these types of "in-network" options before going with an independent policy just to ensure you're well aware of all your options and their relative costs.
It's important to have a frank conversation with your insurance agent before you begin transporting passengers; becoming involved in an accident (even one that's not your fault) and revealing your side job may be enough to void your insurance coverage if your agency didn't have prior notification of your plans. Depending upon your claims history and the length of time you've been driving your vehicle for hire, a new accident claim may even prompt an investigator to begin digging into your past claims to see if there are any funds to potentially recover.
What else may you want to consider?
If you have a loan on your vehicle, you may want to first check with your lender to ensure that you're not violating any of the terms of your loan by using your vehicle for hire. Although most auto loans require only that you (as the purchaser) carry a certain minimum amount of insurance coverage on the vehicle, preserving the lender's asset, some lenders can have more stringent requirements, including restrictions on your ability to operate this vehicle for pay.
To learn more, contact an insurance company like Welsh Insurance Agency Inc.
Share17 March 2017
I still remember the first time I had to chose an insurance policy; I was 17 years old and had just saved up enough money to afford my very first car. I was so excited to begin driving, but overwhelmed with all of the different auto insurance options. My father helped me chose a full-coverage policy that would cover the cost of my car if it were to become damaged in an accident. When I inevitably caused a small fender-bender as a new driver, my insurance company paid for my car repairs, so it sure was the best policy for me! Now that I am older and have learned a lot about home insurance and other types of insurance, I thought I would make a blog to help others who need insurance advice, like what my dad gave me. I hope I can help you make wise insurance decisions!