How Uber and Lyft Drivers Can Save On Livery Insurance
In my last post, I talked about how Uber and Lyft drivers can utilize livery insurance to earn more money and be more independent from Uber or Lyft. Drivers with livery insurance gets to keep the safe rides fee and they can drive their own clients outside of Uber’s and Lyft’s app, which means they get to keep the commission. However, livery insurance is often very costly and doesn’t make sense for most part time drivers. I took a Uber ride in Brooklyn a few weeks ago and I talked to him about how often he drives for Uber. He says he typically drives it only 20-30 hours a week and that is enough to cover his $500 monthly car fee and his insurance of $500 a month. The car fee was a bit high but his insurance was cheap, considering the fares in NYC. Because it is so high, the below points talk about how to save money on livery insurance.
Here are a few ways to save money on commercial livery insurance:
- Look at garaging your car in a cheaper neighborhood – pricing is done by where your car is primarily garage, but they don’t really care where you mainly do business. I am sure you can find a parking lot or a friends house to park at if it will save you a few hundred dollars a month. In metro Boston, rates are in the $800-$1000 a month, whereas it is about $400-$600 in a town about 10 minutes west. Work with your insurance agent to find out which neighborhood would be the cheapest to garage your vehicle
- Longer driving history will reduce your rates – for livery insurance, they only count years years of experience when transporting passenger, whether it was Uber/Lyft or taxi or car service. Usually the insurance is highest when you have 0-1 year of experience and drops off every year after that for the first few years. You can save up to 25% by having more experience, so this is something to consider if you have driven for Uber or Lyft for a few years.
- Look at using a cheaper car – if the car is cheaper, then it will be less costly to insure. However, the bulk of the livery insurance premium is from the liability part of the insurance (liability of your passenger and other cars/people/objects you hit) and only about 20% of the premium goes towards collision coverage. This is something to consider if you really want to cut cost.
- Set a higher deductible – like personal car insurance, the higher the deductible, the cheaper the premium will be. As a business owner, it would be financially prudent to have a few thousand saved up in the event of an accident to pay for the deductible. This savings can either go towards the deductible or paying for smaller damages out of pocket directly, which will keep your premiums low.
- Work through a commercial or livery insurance broker, not a specific company : these brokers have access to a few companies so they can quote all of them and give you the best rates.
- Finding the Right agents – the right insurance broker can either make or break your new business so make sure to do some research on your insurance broker. How many companies does he work with? Will he re-evaluate your insurance application every six months so you can get the best deal? What does he do to protect your business or lower your overall expenses? Does he deal primarily with drivers in the limo or taxi industry? Do they even cover Uber and Lyft drivers, even if they cover livery/taxi drivers (some may not, surprisingly enough)? What is your agent’s background in the rideshare industry, or the limo/taxi industry?
- Make sure to resolve any open cases : open cases can drag on and increase your premiums as long as they are open. When they are open, they could be at risk of turning against you, which will make it more expense to insure you down the line. It is best to get them resolve as accurately and quickly as possible so you don’t have it looming over your insurance and your overall business
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