A lot of TLC drivers are surprised to find out that the policy they have purchased does not cover damages to their vehicle. It’s best to understand what you are, and are not covered beforehand so there are no surprises. In New York City, TLC drivers are required to maintain a liability policy in order to operate a for-hire vehicle. Most TLC policies exclude any coverage to the vehicle itself being insured – you check carefully to see if this coverage exists.
Let’s you have determined that your policy doesn’t provide any coverage for damage to your vehicle, should you buy a collision policy? Well first you must think about a few questions:
- Is the vehicle financed or owned outright?
Finance companies typically require that you purchase collision coverage since they are extending a loan to you collateralized by your vehicle. If the vehicle is in an accident, the finance company’s collateral can disappear in an instant. Most finance companies and banks require that they are added onto a collision policy as a “Loss Payee.” This means that if there is an accident and your insurance company pays a claim, the finance company/bank would get paid first since they have given you a loan on the vehicle.
- Can you afford to pay for repairs out of pocket?
Accidents happen. Regardless of how safe you think you drive, there are just situations completely out of your control. TLC drivers are typically very sensitive to the cash flow from their profession. Drivers need to think about if they can afford to pay for repairs in case there is an accident and there is no insurance coverage.
- Can you afford to buy a new vehicle in case there is a total loss?
A total loss can occur when the cost to repair the vehicle exceeds the value of the vehicle itself. Unfortunately, accidents can occur that can completely destroy your vehicle beyond repair. Drivers depend on their vehicle for income, so every day without a car, typically means no income for the driver. You must carefully think if you can afford to purchase another vehicle in the case of a total loss without any insurance coverage.
- How old is your vehicle and what is it worth today?
Certain older vehicles may be difficult to insure and may be valued too low. In other cases, the vehicle may only be good for a few more months before it needs retirement, so the risk of not having collision coverage is lower. On the other hand, if you just bought a brand new Cadillac – the equation is completely different. Think about the value of your vehicle and what it is worth today, not when you purchased the vehicle. A good place to looks is Kelley Blue Book website, keep in mind that TLC vehicles typically put on a lot more miles in a year than a private vehicle so the estimates may need to be adjusted downwards.
Making the decision to purchase coverage
If you have gone through these questions and have determined that paying for repairs or buying a new vehicle would be too much of a risk, we suggest you purchase a collision policy. The inshur app can automatically gather the value of your vehicle and provide you with various options for collision coverage.
And as with most things insurance related, collision policies have various options to think about such as deductibles (how much you will be responsible to pay first in the event of a claim) and coverages. Some policies only cover collision, while other include fire, theft and lightening for additional premium. As always look for suggestions from the inshur app to make a determination on the coverage you need, and if you have any questions feel free to contact us with any questions.