I rent a 15 passenger van and shuttle college students from campus to home and back over breaks. I drive the rental van 10 days each year, but isurance agents tell me I need an annual vehicle liability policy for $5,000 that can't be canceled or prorated to just the days I operate. Is there an insurance product out there for a small transportation business that doesn't operate year-round?
Cost of insurance is killing my business
byu/ramhamtp inInsurance
Posted by ramhamtp
9 Comments
Do you only drive the van for those 10 days a year?
Might want to reconsider this business if your only doing it 10 days a year as the profits doesn’t seem to outweigh the overhead.
Not going to find a insurance company that is willing to take on that high risk exposure for a short term policy. might be able to find a commercial auto policy that would 6 months but most of them are annual policies. Most if you cancel early will have a minimum earned premium of usually 25%
I come across this issue all the time with side hustles. There’s not an option out there for temporary commercial auto. The risk of a large claim is way too high (Think about the size of lawsuit if those students get injured in a wreck). So even if you drive 10 days a year, it just takes one accident and the company could be paying out hundreds of thousands in claim payments.
If you’re renting from Enterprise, I’d see if they have an insurance option that applies to commercial exposures.
This isn’t a viable business. Either move on, or expand it into other dates.
From an insurance standpoint, I don’t know of any companies willing to cover a non-owned van, rented a few days a year, as the only vehicle on the policy.
No, there is no such thing unless you buy the coverage from the rental agency with similar limits, which probably costs significantly more than what you’re currently paying, and very likely doesn’t cover you if there’s an accident.
Your choices are to either grow or to give it up. I don’t see an option where you keep going as is.
So you don’t own the van? You rent a van and charge college students to drive them home?
Not going to lie here. As an independent broker, it’s too much work for me to source a policy such as this which I’ll have to service, cancel, re-write just to meet your requirements. The commission, then the reversal is frustrating. In the end, you are asking an agent to do a ton of work for a tiny commission. I’d tell you the same thing that the annual premium is due upfront and no early cancelation. Sorry to be blunt but this is my reality.
Your not charging enough for the your services, either double it or move onto another venture. It’s a difficult clasa
Passenger vans potentially full of younger people are high risk. They tip over and are full of distracting people. There is less over all car that can be damaged without damaging a human, much less multiple humans. I worked in an area pricing/underwriting this type of risk for a while and 15 passenger vans were a real nightmare to justify continuing with that business.